2. Legal Implications of Workplace Restructuring
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Laura L. Mensch, Partner
3. Legal Implications of Workplace Restructuring
• Economic necessity (downsizing)
• Significant re-organization due to changes
in business
• Smaller-scale changes to business
affecting only one or a few employees
ff ti
l
f
l
3
4. Legal and Other Implications
• Protect legal position
• F i t t
Fair treatment of employees
t f
l
• Manage business effectively in a changing
y
economy or altered business environment
4
5. Employee Reorganization
• Workforce reductions
• Changes to employee roles and
compensation
• Temporary layoff
• Business transactions
- Acquiring or eliminating employees
q
g
g
p y
- Changes to compensation or benefit
plans
5
6. Workforce Reductions
• Group or mass terminations
• Specific statutory requirements
• Common law or contractual requirements
• Practical considerations
6
7. Statutory Requirements
• Vary across provinces
• Minimum statutory notice still applies to
the individual termination but differences
across provinces when group terminations
7
8. Alberta
• Written notice to Minister of Labour of
intention to terminate 50 or more
employees within a four-week period
(four weeks notice)
weeks’
• Number of employees and effective date
• Individual statutory notice period not
affected
8
9. Ontario
• Written notice to Minister of Labour when terminating 50
or more employees within a six-month period
• Statutory notice period is increased when terminating 50
or more employees within a four-week period
- 50 t 200 employees – 8 weeks
to
l
k
- 201 – 500 employees - 12 weeks
- 500+ employees – 16 weeks
• Statutory severance pay if employee has five or more
years of service and the severance occurs because of
permanent discontinuance of all of part of the employer’s
business at an “establishment” within a six month period
9
10. British Columbia
•
•
•
•
Written notice to Minister of Labour and to each affected employee when
terminating 50 or more employees at a single location within a two-month
period
- Number of employees, effective date and reasons for termination
Minister has option to establish an “adjustment committee”
- Employer and employee representatives
- Purpose to eliminate need for termination or minimize impact of
termination
Statutory notice of group termination must be given
- 50 t 100 employees – 8 weeks
to
l
k
- 101 to 300 employees – 12 weeks
- 300+ employees – 16 weeks
In addition to and does not include individual statutory notice which still
to,
include,
notice,
applies
10
11. Common Law “Reasonable Notice” Requirements
• Still apply to each individual employee affected
by a group termination
• Bardal factors
g
- Age
- Length of service
- Character of employment
- A il bilit of similar employment
Availability f i il
l
t
(experience, training, qualifications)
- N t exhaustive
Not h
ti
11
12. Common Law “Reasonable Notice” Requirements – cont.
• Economic circumstances of employer may be
considered when determining the notice period
v.
Inc.
- Bohemier v Storwal International Inc
(ONCA, 1983)
- Heinz v. Cana Construction (1987, ABQB)
- Sarton v. Fluor Canada Ltd. (1986, ABCA)
- Sifton v Wheaton Pontiac Buick GMC
v.
(2010, BCSC)
12
13. Common Law “Reasonable Notice” Requirements – cont.
• Employer must lead evidence of economic
p y
hardship
(
)
- Novak v. Fintech Services Ltd. (2001, ABQB)
- Pauloski v. Nascor Inc. (2002, ABQB)
(
)
- Russell v. Stewart (Winnifred) Association
for the Mentally Handicapped (1993, ABQB)
13
14. Common Law “Reasonable Notice” Requirements – cont.
• Economic conditions are only one factor
• Could also be used to increase length of time for
employee to find new employment
- Wilks v. Moore Dry Kiln Company of
Canada Limited (1981, BCSC)
(
,
)
- Ducharme v. Cambridge Stamping Inc.
(2008,ONSC)
14
15. Structuring Group Termination Packages
• Formulaic, despite individual Bardal factors
,
p
• Employees discuss and look for internal fairness
• Formula should incorporate Bardal factors
- mid-range offers
• Must still consider individual circumstances
• E.g. Disability or maternity/parental leave
15
16. Manner of Compensation
• Working Notice
• Severance
- Lump sum
- Salary continuance
• Combination of working notice and
se e a ce
severance
16
17. Working Notice
• Effect on morale and productivity
- absenteeism
- “presenteeism”
• Security of employer information
• Potential increase of sick leave, disability, WCB claims
• Employer policies still continue to apply
- but difficult to enforce?
• Must give reasonable time off for employment search
• Difficult to obtain a release
17
18. Severance Payments – Elements of Compensation
•
•
•
•
•
•
•
•
•
Put employee in position as if had been given working notice
Salary
Benefits
• Note Ontario obligation to continue benefits through statutory
notice period
Bonus?
B
?
Actively employed
- Stea v. Kulhawy (1996, ABCA)
- P l v. Whi l
Poole Whirlpool Corporation (2011 ONSC)
lC
ti (2011,
Non-discretionary and integral
- Daniels v. Canadian Tire (1991, ONSC)
Commission?
- Farmer v. Foxridge Homes (1994, ABCA)
18
19. Severance Payments – Salary Continuance
•
•
Employee may be actively at work or not working
Subject to mitigation payment
- e g 50% of remainder of salary payments when obtains new
e.g.
employment
• Incentive to look for work
• P t ti l cost reduction t employer
Potential
t d ti to
l
• But may require notice at upper end of range (Albach v. Vortek
Industries, 2000 BCSC)
• Employer must monitor employee mitigation efforts and success
• Option of discounted lump sum severance or salary continuance
- may reduce costs
• Can obtain release if employee not actively working
- no payments until sign release
19
20. Outplacement Services
• Beneficial to employee
• Useful for employer to argue mitigation
f f
• Offer without requirement for settlement
a d e ease
and release
20
21. Changing Terms of Employment
• Position and duties
• Fixed compensation
• Variable compensation (
(bonus,
commission)
• Employee may argue constructive
dismissal
21
22. Constructive Dismissal
• Employer makes unilateral, substantial change to an
essential term of employee contract
- Employer repudiates the contract
• Employee does not agree to change
• E l
Employer may argue:
- Change is not substantial change to essential term
- Employee agreed to change; or
- Employee condoned or acquiesced in the
change
22
23. Constructive Dismissal – cont.
• Test is objective
• Would a reasonable person in the same situation as the
employee have felt that the essential terms of the
employment contract were substantially changed?
• Relevant time is when the change is made, not when it
will affect the employee
p y
- e.g. employee not obliged to wait around and see
whether compensation will really be reduced by
the change
23
24. Constructive Dismissal – cont.
• Corporate reorganization typically not a defence
• But courts less likely to find constructive termination in
context of more wide-sweeping change
•
•
Doran v. Ontario Power Generation Inc. (2007, ONSC)
Kuz v. CIBC Trust Corp. (1998, ABQB)
• Corporation shows changes were designed to preserve
overall employment and profitability, especially where
change to employment not terribly significant
•
•
Meyers v. Chevron Canada Limited (2013, BCSC)
Still very specific to employee circumstances
24
25. Changes to Compensation
• 15 - 20% or more is almost certainly a
constructive dismissal
• 5 to 10%?
• Courts consider overall effect on
compensation
- Doran 14 to 17%
25
26. Variable Compensation
• Change to fixed or regular compensation likely a
constructive dismissal
• Pathak v. Jannock Steel Fabricating Co. (1999, ABCA)
- Elimination of a bonus was fundamental and was a
constructive dismissal
• Prozak v. Bell Telephone of Canada (1984, ONCA) and
Conway v. George’s Farm Centre (1986, ABQB)
- Switch from commission to (lower) fixed
compensation is a constructive dismissal
26
27. Variable Compensation – cont.
• But, if the compensation is really intended to vary, and
does vary, likely not a constructive dismissal
- Chapman v. Bank of Nova Scotia (2008, ONCA)
• Employer entitled to change terms affecting variable
compensation provided fundamental terms of contract are
adhered to
- Haglund v. Clean Harbours Canada Inc. (2008, BCSC)
• Modest changes to benefit programs will not amount of
constructive dismissal
- Otto v. Hamilton and Olsen Surveys (1993, ABCA)
27
28. Employee Condonation or Acquiescence
• Acceptance or remaining in employment for
p
g
p y
longer than a “reasonable period”
y
• Wronko v. Western Inventory Services Ltd.
(2008, ONCA) suggests employee may remain
under protest and still claim full damages
- unique facts
- has not been followed in Alberta
28
29. Employee Obligation to Mitigate with Same Employer
• Applies to actual termination and constructive
termination
• Evans v. Teamsters Local Union No. 31 (2008, SCC)
• Exceptions:
- Compensation substantially lower
- Working conditions substantially different
- Work demeaning
-P
Personal relationships acrimonious
l l ti
hi
i
i
- Hostile work environment
p
g
• Useful in context of corporate reorganization or
transaction
29
30. Lay-Off
• Statutory concept
• At common law, depriving a person of work and pay
constitutes constructive dismissal
• To avoid constructive dismissal claim:
- Layoff notice must be extremely clear and specific
requirements followed
- Vrana v. Procor (2004, ABCA)
- Employment contract must contemplate employer
right to lay off
- Turner v. Uniglobe Travel (2005, ABQB)
g
(
,
Q )
• Useful tool in industries and work environments where
layoff is part of the employment culture
30
31. Employment Agreements
• Limit notice (subject to statutory compliance)
(
j
y
p
)
• Contract out of constructive dismissal
- Magyrosi v. Berg Chilling Systems (ONSC,
2001)
)
• Contemplate layoff ( appropriate)
p
y (if pp p
)
31
34. Importance of this topic
• Why this topic is important:
• Ever-increasing fluidity o workforce
e c eas g u d y of o o ce
• HR professionals may be expected to manage
employees in multiple j
p y
p jurisdictions
• Fundamental differences between some legal
regimes
• Variations in specific laws and practices
between jurisdictions
• Scope for confusion: complexity of “conflicts”
rules
34
35. Some substantive legal issues affected
Some employment law issues that can be
p
y
complicated by cross-border movements
•
•
•
•
•
•
•
•
Wrongful dismissal
Restrictive covenants
Discrimination
Workers
Workers’ compensation
Employment standards
Taxation
Portability of pensions
Stock options
35
36. An Illustrative Cross-Jurisdictional Wrongful Dismissal Case
Young v. Tyco (Ontario Court of Appeal,
)
2008)
•
•
•
•
•
Employee transferred from Ontario to USA.
Worked in three states over 21 months.
Dismissed for cause by US affiliate.
Would the Ontario courts take jurisdiction?
Why that issue had importance for the parties:
• Indiana laws (employment at will) v the laws
v.
of Ontario
• Location of parties/witnesses
36
37. Will a court take jurisdiction?
Jurisdiction: Will a court take jurisdiction
over a case?
• Contexts in which this question may arise:
• Plaintiff makes the initial selection of “forum”.
forum
• Service outside the jurisdiction: defendant
applies to set aside service
service.
• Or defendant applies for a “stay” of the action.
• Later: Enforcement of “foreign” judgments
foreign
37
38. Jurisdiction: A two-step analysis
• Accepting jurisdiction: Two basic questions
1. Can the Court legitimately assume
jurisdiction?
2. If so, is it the most convenient forum to
decide the dispute?
38
39. Real and Substantial Connection
• Jurisdiction Proper (first issue)
• The basic test is whether the case has a
“real and substantial connection with the
real
connection”
forum.
39
40. Young v. Tyco: Real and Substantial Connection
• Young v. Tyco
• Facts re Ontario connection were in dispute:
p
• Had pre-transfer employment contract with Ontario
corporation been terminated?
• Had Young been assured that it had not?
• Why did he take a temporary L-1A Visa?
• Were the US assignments only temporary positions?
• Court: Plaintiff’s version should be accepted
as long as it has a reasonable basis on the
record.
• Held that the Ontario Courts had jurisdiction
jurisdiction.
40
41. Real and Substantial Connection – cont’d
• In Club Resorts v. Van Breda (S C C
v
(S.C.C.,
2012), a new approach was introduced –
that of looking for one or more “presumptive
presumptive
connecting factors”.
• The Supreme Court’s idea was to avoid
Court s
“abstract concerns for order, efficiency or
fairness
fairness”.
41
42. Real and Substantial Connection – cont’d
• Presumptive connecting factors that, prima facie,
entitle a court to assume jurisdiction:
(a) defendant is domiciled or resident in the province;
(b) defendant carries on business in the province;
(c) tort was committed in the province; and
(d) a contract connected with the dispute was made in the
province.
• Other factors may be introduced in the future.
y
y
y
• In theory, this approach may make the analysis
simpler, but it does not seem well suited to
employment disputes.
42
43. Convenient forum
• Next question: Is there clearly another forum that
is more appropriate to hear the action?
• Factors used to assess the connections to each forum:
1. Location where the contract was signed
2. Applicable law of the contract
3. Location of witnesses
4.
4 Location where the bulk of the evidence will come from
5. Location in which the factual matters took place
6.
6 Residence or place of business of the parties
7. Loss of a legitimate juridical advantage.
This list is not exhaustive.
43
44. Tyco: Application of convenient forum test
Tyco case
p
• Place of residence of harassment complainants
found to be “probably neutral” as a factor.
y
j
g
• Key were two “juridical advantages”:
1.Being able to litigate in a jurisdiction in which
judges are used to awarding to damages
equivalent to reasonable notice.
2.“access to justice” (advantage to Young of home
jurisdiction)
44
45. Forum Selection Clauses
• The parties may simplify the issue by including a
contractual choice of forum (attornment) clause in
their contract.
• These clauses are generally to be encouraged by the
courts
co rts as the create certaint and sec rit in transaction
they
certainty
security transaction,
… order and fairness, which are critical components of
private international law: Morguard Investments Ltd. v.
De Savoye. (S.C.C., 1990).
• The courts will approach the convenient forum issue from
a different starting point which is that the parties should
point,
normally be held to their bargain. Z.I. Pompey Industrie v.
ECU-Line N.V. (S.C.C., 2003)
45
46. Forum Selection Clauses – cont.
• Not all forum selection clauses are equally
effective.
• Exclusive forum selection clauses may
be relied upon to prevent employee from
suing in a different court.
• Arbitration clauses are similar in nature
to forum selection clauses, and may also be
worth considering
considering.
46
47. Applicable Law
• Which jurisdiction’s laws should be applied
is a different question from choice of forum
(jurisdiction).
• Parties may agree on “choice of law”.
choice law
Contractual choice will normally be
respected in common law jurisdictions
jurisdictions.
• In civil law jurisdictions, choice of law
cannot deprive employees of “mandatory
mandatory
protections” of defined jurisdiction.
47
48. Applicable Law – cont.
• Where no agreement on “choice of law”: courts
will apply laws of the jurisdiction with the closest
and most real connection.
• What is the “closest and most real connection”?
• Typically, the jurisdiction in which most
services performed.
• E.g. Dallas Oilfield Contractors v. Petroneuk (Sask,
1980)
•
•
•
•
Plaintiff a resident o Sas atc e a
a t
es de t of Saskatchewan.
Employer an Alberta corporation.
Work done in BC.
BC laws held to apply.
48
49. Applicable Law – cont.
• Not necessarily so where the employee is p
y
p y
posted
overseas for a short duration.
g
gy
(
• E.g. Petroasia Energy Inc. v. Samek (Alberta
Q.B., 2008)
• Alberta company hired employee to set up an
office and obtain O & G concessions in
Kazakhstan.
• Alberta law held to apply.
49
50. Proving “foreign” laws
• How does a party expect a court to apply the
laws of a different jurisdiction?
• It must prove the laws through an expert witness
(a lawyer from the other jurisdiction).
• E.g. Buchanan v. Geotel (Ont., 2002)
• Stock option agreement provided it was governed by the laws of
Delaware.
• Both parties called Delaware lawyers as experts.
• The experts gave conflicting opinions.
• The judge preferred one of the experts and found that the law of
experts,
Delaware led to the same result as the law of Ontario would have.
50
51. Proving “foreign” laws – cont’d
• “Foreign” laws may include the laws of
another province.
• In practice, the courts will take notice of,
and apply the statutory and case law of
apply,
another province.
• H
However, Q b l
Quebec law may h
have t b
to be
proved.
• A held i G
As h ld in Gagnon v. C
Cooperative A i l d Bas
ti Agricole du B
St.-Laurent (1985, N.B.)
51
52. Situations giving rise to cross-border issues
• Cross-border employment law issues arise in
p y
many different kinds of situations – e.g.:
•
•
•
•
•
Hiring from abroad
Transfers between provinces
f
Transfers in or out of Canada
Temporary assignments of foreign workers to Canada
Temporary assignments of Canadians overseas
• This makes any attempt to devise a checklist
dangerous and unsatisfactory.
52
53. Some issues to be considered
• However, a few of the legal issues which will typically need to be
addressed in cross-border situations include:
• Employment contract
• Is the existing one to continue to apply?
• If so, what amendments are required?
• Diff
Different employer?
t
l
?
• Choice of law
• Which jurisdiction?
• Forum selection
• Which jurisdiction?
• Make the selection exclusive?
• Consider arbitration?
53
54. Some issues to be considered – cont’d
• Policies and manuals
• Are existing policies appropriate for employees being transferred
abroad?
• Employment standards
p y
• Which jurisdiction’s laws will apply?
• Worker’s compensation
• Is coverage available where the employee will be working?
• Should employee consider separate insurance for workplace
injuries?
54
55. Some issues to be considered – cont’d
• Tax
• Does the employee assume the employer is responsible for tax
planning issues?
•
•
•
•
Stock options
p
Medical coverage
Social security benefits
Pension entitlements
• E.g. transferability of existing plans
• Immigration issues
55
56. Immigration Update and Employer
Compliance – What You Don’t Know Can
Hurt You
February 6, 2014
Bill MacGregor
57. Introduction
• Focus of today is on compliance, and what employers need to
know to avoid problems
• Trends:
• Greater onus put on employers and their decisionmakers
• Increased penalties and consequences for failure to
comply
• R
Reasons f t d
for trends
• Failure to follow rules will detrimentally affect businesses that
employ foreign workers, or move p
p y
g
personnel across borders
• e.g. Entry refusals; red flags on travelers; company reputation at border
tarnished etc.
57
58. Penalties and Consequences
Under IRPA:
• S124 - violation if you employ a foreign worker without
proper authorization
• Deemed knowledge of violation unless you can show due
diligence was used to determine whether TFW was
authorized
• S126/127 – violation where anyone directly/indirectly
misrepresents or omits to provide a material fact that “could
p
p
induce an error” applying IRPA
• Penalties include fines up to $100,000 and jail time
• Emplo ers fo nd to be non compliant face 2 year ban from
Employers found
non-compliant
ear
being able to use TFWP
58
59. Crossing Borders for Business Purposes
• Key Question – Does the activity require a work permit?
• If not, may enter as a business visitor
• C
Common f
fallacies:
• Short visit = no work permit needed
• No direct pay in foreign country = no work permit needed
• Professional services contracts = no work permit needed
• What matters is the purpose of entry / activity
• If a work permit is needed, then must identify a category that
fits the person and the purpose of entry
59
60. Crossing Borders: Common Issues / Pitfalls
• Regional sales territories across
U.S/Canada b d
U S/C
d border
• Managers with North American
responsibilities
• “Do you have hiring/firing or disciplinary power” over
personnel?
l?
• Is there a degree of operational management being
done?
• How is employee portrayed on the web?
• Officers know how to use Google and Linked-in
Linked in
• Public announcements regarding position may suggest
FW is already working
60
61. Crossing Borders: Common Issues / Pitfalls
• What are personnel traveling with?
• business card content
• tools or equipment
• computers / PDAs
• What are personnel traveling without?
• Supporting documentation
• Best practices – support letters for business travelers
61
62. Crossing Borders: Pitfalls – Criminal Inadmissibility
Canada Entry:
• DUI/DWI conviction of any sort = inadmissible
y
• U.S. pardons may not be recognized
• Temporary Resident Permits = possible solution
U.S. Entry:
• Crimes of Moral Turpitude / zero tolerance for any drug
conviction
• Canadian pardons not recognized
• O l solution i a U S waiver, which t k months t
Only l ti is U.S.
i
hi h takes
th to
obtain
Lessons: Must find out if there are
convictions; consider employment contract
terms regarding ability to travel if a bona fide
62
63. LMOs: New Rules as of July 31, 2013
• Labour Market Opinions (LMOs) - basis for many Canadian
work permits
• July 31 2013: new LMO rules introduced
31,
• Advertising requirements increased – content and
p
placement
• Outsourcing questions
• Employer declarations in application form more
onerous
• Consequences
• Timelines have increased
• Incumbents
• Public disclosure of salary / openings
y p
g
63
64. New Regulatory Regime as of January 1
• To “detect and deter employer noncompliance”
li
”
• New IRPA Regulations introduced January
1, 2014
• Significant changes to Regulations
g
g
g
• Many more statutory requirements put on employers
(both for LMO and LMO exempt work permit situations)
• Revisions to substantially the same test
• Length of compliance period increased from 2 to 6
years (but not retroactive)
• Broad powers of inspection granted to CIC and Service
Canada officers
64
65. New Regulations – New Employer Conditions
For all TFW Situations (LMO based or
LMO exempt):
• Must comply with laws regulating employment and recruiting
• Must provide each TFW with “same occupation”, and wages and
working conditions which are “substantially the same – but not less
g
y
favourable than” the TFW’s offer of employment
• Must make “reasonable efforts” to provide a workplace free from
abuse
• During the “period 6 years beginning on the first day of employment
for which the work permit is issued”, must be able to show (1) any
information provided to g LMO/WP was accurate AND ( ) must retain
p
get
(2)
any document that relates to compliance.
•
Failure to comply is only justified if employer “made all reasonable efforts” to
comply
65
66. New Regulations – New Employer Conditions / LMOs
For LMO based work permits, there are
further conditions in addition to the ones on
the last slide
• M t be able t d
Must b bl to demonstrate factors used
t t f t
d
to grant LMO have been met
• E.g. If employer says jobs will be created, need to
demonstrate that
• Must maintain documents to show this for the 6 year
look back period
66
67. New Regulations – Inspections
Very broad inspection powers granted:
• M occur without a warrant at any place
May
ith t
t t
l
where TFW works or did work
• May demand any documents or access to
computer systems
• Triggered randomly or where there is a
concern (so complaint from employee may
(
p
p y
y
trigger)
• Can occur anytime up to 6 years from first
date of employment of TFW
67
68. LMOs: Employer Compliance Reviews
• ECRs have been increasing
• Random selection or complaint driven
• Pre-2014 test and post-2014 test
• Will review payroll records, time sheets, contracts etc. to verify
• Information sharing with provincial authorities = possible
further liability if breach occurs
• Issue of changes to employment terms of TFWs
68
69. New Rules – Effect on LMO Applications
• Further changes as of January 1, 2014, in
addition to new rules introduced on July 31
31,
2013
• N
New f
forms f LMO applications
for
li ti
• Declaration section expanded
• R
Required t review wage annually t ensure prevailing
i d to
i
ll to
ili
wage being paid; must adjust it up if necessary
• Some additional supporting documents (proof of
workers comp)
• Non-compliance risk has increased,
p
,
therefore must be very careful in preparing
forms
69
70. Best Practices for Compliance
Clients need to adopt best practices and internal
policies
• Recruiting protocols to ensure consistency
• Review of LMO application content and Work Permit Support
letters
• Document retention relating to TFWs and recruiting – will
need to be maintained for 6 years from first date of employment
of TFW
• Changing employment terms – need protocol in place
• Longer term strategies – e.g. moving TFWs to permanent
status as soon as possible
70
71. Future Immigration Developments
• Clarification of recent changes
• Service Canada directives for LMOs? Revised TFW
Manual?
• Canada-EU Free Trade Agreement
• Will have mobility provisions
h
bilit
i i
• TFW Program to be further revised this
year??
• Expect narrowing of some work permit categories
• e.g. transferee category limitations on % of foreign
workers; increased minimum experience for specialist
transferees?
• “Fast Track” LMOs re-introduced??
• Further compliance obligations likely to be put on employers
71
72. Conclusion
• Companies engaging TFWs need to be
aware of trend of increasing compliance
requirements and negative consequences of
non compliance
non-compliance
• Companies and their managers may face
exposure for non-compliance
• Companies must be able to demonstrate
ongoing compliance, whether TFWs are
compliance
here under LMO or LMO exempt WPs
• P
Proactive approach to crossing b d
i
h
i borders,
hiring foreign workers and implementing
t
i t
l
t
d li i i
72
75. Overview
• 1) What constitutes a privacy breach?
• 2) Key steps in responding to privacy
breaches
• 3) Best practices for safeguarding against
further privacy breaches
75
76. Overview
• Alberta Privacy Framework
• Private: Personal Information Protection Act
(“PIPA”)
• Public: Freedom of Information and Privacy Act
(“FOIP”)
• Federally regulated: Personal Information
Protection and Electronic Documents Act
( PIPEDA )
(“PIPEDA”)
• Health records: Health Information Act (“HIA”)
76
77. Alberta Privacy Framework
PIPA: Private Sector
• Addresses collection, use and disclosure of personal information and
right to request access to personal information
FOIP : Public Sector
• Regulates how p
g
public bodies conduct the collection, use and
,
disclosure of personal information and right to access to access all
information held by public bodies
PIPEDA: Federal Undertakings
•
Addresses collection, use and disclosure of personal information
and the right to access personal information
HIA: Health S
Sector
•
Addresses collection, use and disclosure practices of custodians
and provides individuals with the right to access health records in
p
g
custody or under control of custodians
77
78. Privacy Breach Notification
What is a privacy breach?
• Privacy Breach occurs when there is:
• “a loss, unauthorized access to, or disclosure of personal
information”
• Common privacy breaches happen when personal information
of customers, patients, clients or employees is lost, stolen or
mistakenly disclosed
78
79. Privacy Breach Notification – PIPA
PIPA
• First Canadian jurisdiction to require mandatory privacy breach
notification by private sector organizations
• Requirement: Private sector organizations are required to notify
the Privacy Commissioner if personal information under its control
is without authorization accessed, lost or disclosed (s. 34.1)
• Offences / Penalties:
• Failure to notify Commissioner of a breach is an offence
• Organizations liable of a fine up to $100,000 under s. 59(2)(b)
79
80. Privacy Breach Notification – PIPA
When must the Commissioner be notified?
• An organization having personal information under its control must,
without unreasonable delay, provide notice to the Commissioner of any
incident involving the loss of or unauthorized access to or disclosure of
the personal information where a reasonable person would consider that
there exists a real risk of significant harm to an individual as a result of
the loss or unauthorized access or disclosure
80
81. Privacy Breach Notification – PIPA
When must the Commissioner be notified?
• Threshold of notification: “real risk of significant harm”
• “Significant harm” means “a material harm”; it has non-trivial
consequences or effects.
• “Real risk means “a reasonable degree of likelihood that the harm
Real risk”
a
could result”; must be more than “merely speculative” and not simply
“hypothetical or theoretical”
81
82. Privacy Breach Notification – PIPA
Assessing the Breach
• OIPC provides a Mandatory Breach Reporting Tool
(http://www.oipc.ab.ca/Content_Files/Files/Publications/Mandatory_Breach_Reporting_T
ool_2012.pdf)
1. Has there been a breach involving “personal information”?
2. Does your organization have “control” of the personal information
breached?
3. What is the sensitivity of the personal information breached?
4. Would a reasonable person consider that a real risk of significant harm
exists to an individual as a result of the breach?
82
83. Privacy Breach Notification – PIPA
Assessing the breach
• If an organization determines that there is a real risk of significant
harm to an individual as a result of the breach – must report
breach to the Commissioner
• If an organization’s internal assessment determines that there is
g
not a real risk of significant harm to an individual, do not have to
report
• Advised to retain a copy of the mandatory breach reporting tool which
allowed an organization to determine breach was not significant
83
84. Privacy Breach Notification – PIPA
What are the contents of notice to the Commissioner?
• breach report form:
http://www.oipc.ab.ca/Content_Files/Files/Publications/Breach_Report_Form_July
htt //
i
b /C t t Fil /Fil /P bli ti
/B
h R
t F
J l
_2012.pdf
• description of circumstances of loss or unauthorized access or
disclosure
• date on which, or time period during which, loss or unauthorized
access or disclosure occurred
• description of personal information involved in loss or
unauthorized access or disclosure
• assessment of risk of harm to individuals as a result of l
t f i k fh
t i di id l
lt f loss or
unauthorized access or disclosure
• estimate of number of individuals to whom real risk of significant
harm as a result of loss or unauthorized access or disclosure
84
85. Privacy Breach Notification – PIPA
What are the contents of notice to the Commissioner? (cont.)
• description of steps organization has taken to reduce risk of harm
to indi id als
individuals
• description of any steps organization has taken to notify
individuals of the loss or unauthorized access or disclosure
• name of and contact information for a person who can answer, on
behalf of organization, Commissioner’s questions about the loss
or unauthorized access or disclosure
85
86. Privacy Breach Notification – PIPA
What happens after notification?
• When notified, Commissioner will review information provided and
p
determine whether affected individuals need to be notified
• Organization can also proactively notify individuals
• Commissioner can direct organization to notify individuals directly
and include description of loss, date occurred, description of
personal information, steps organization has taken and contact
information who can answer on behalf of organization
• Purpose of notification to individuals is to allow individual to take
steps to reduce risk of harm, or extent of the harm, where possible
86
87. PIPA Decisions – Breach Notifications
P2012-ND-34 (“Conoco Case”)
• On January 7, 2013, ConocoPhillips Canada (North) Limited ordered
to tif individuals
t notify i di id l regarding l
di loss of personal i f
f
l information
ti
• Employee’s home broken into
• Employee’s workbag contained information on 11 students that had
Employee s
applied to ConocoPhillips
• Following items were stolen and not recovered:
•
•
•
•
Resumes with contact information
Unofficial University transcripts
Recruiting questionnaires
gq
Interview matrices
87
88. PIPA Decisions – Breach Notifications
Conoco Case (cont.)
Findings:
Information stolen was classified as moderately sensitive (i.e., did
t contain SIN numbers, credit card information)
However,
However information could be used to cause significant harm
Relevant factor was that documents were stolen and never
covered
Real risk of significant harm to students in the form of identity theft,
ud, embarrassment and humiliation
Ordered to notify individuals, which ConocoPhillips had already done
individuals
.
89. PIPA Decisions – Breach Notifications
P2013-ND-10 (“Sun Life Financial Case”)
March 26, 2013: Sun Life Financial ordered to notify individuals
garding l
di loss of personal i f
f
l information
ti
RRSP income statements were mailed to incorrect addresses for 11
embers and not recovered
RRSP income statements contained the following information:
•
•
•
•
•
Name
Address
Add
Social Insurance Number
Group RRSP contract number
2012 RRSP withdrawal amount and related income tax deduction
90. PIPA Decisions – Breach Notifications
Sun Life Financial Case (cont.)
Findings:
Information classified as highly sensitive
Exposes individuals to risk of identity theft and fraud
Information was lost and not recovered
Due to these factors, Commissioner determined likelihood of
gnificant harm, identity theft and fraud, will occur to the individuals
Ordered to notify individuals, which Sun Life Financial had already
ne
91. PIPA Decisions – Breach Notifications
2013-ND-18 (“Sculpz Case”)
May 9, 2013, Sculpz, Inc. (operating as Enchantress Hosiery of Canada)
as ordered t notify i di id l of unauthorized access t and di l
d d to tif individuals f
th i d
to d disclosure
personal information
During a scheduled security review, Sculpz discovered its website had
en hacked
Website server log showed unauthorized access for 5 days
154 Alberta customers affected
The following customer information was exposed:
•
•
•
•
•
Name
Address
Phone number
Email address
Credit card number and expiry date
92. PIPA Decisions – Breach Notifications
Sculpz Case (cont.)
Findings:
Information exposed is highly sensitive
Includes credit card information that was not encrypted
Type of harm that could result is identity theft and/or fraud
Affected individuals can also be at risk of phishing (email addresses,
dresses and phone numbers involved)
Incident involved criminal intent
Real risk of significant harm because hackers were specifically after
stomer’s credit card information
Ordered to notify all affected individuals which Sculpz had already
ne
93. Privacy Breach Notification – PIPEDA
Federal legislation – PIPEDA
• Current framework for privacy breach notification in private sector
outside of Alberta is PIPEDA
• Voluntary security breach notification
• Guidelines from Federal Privacy Commissioner
94. Privacy Breach Notification – PIPEDA
Federal legislation – PIPEDA
Currently, under PIPEDA data breach requirements, subject to certain
untary guidelines
• Key Steps for Organizations in Responding to Privacy Breaches
•
http://www.priv.gc.ca/information/guide/2007/gl_070801_checklist_e.asp
htt //
i
/i f
ti / id /2007/ l 070801 h kli t
The Commissioner also developed an associated checklist to assist
ganizations in ensuring they have dealt with all relevant considerations of the
each
h
95. Privacy Breach Notification – PIPEDA
uidelines state four key steps to consider when
sponding to a breach:
Breach containment and preliminary assessment
Evaluation of the risks associated with the breach
Notification
Prevention
96. Privacy Breach Notification – PIPEDA
Key Steps to Consider When Responding to a Breach
Breach
ontainment and
eliminary
ssessment
2. Evaluation of
the Risks
Associated with
Breach
3. Notification
4. Prevention
ke immediate
mmon sense steps
imit the data breach
What Personal
Information was
Involved?
In determining whether
to notify should
consider:
termine who should
made aware of the
ident internally and
entially externally
What was the Cause
and Extent of the
Breach?
(1) Risk of harm to;
Investigate the breach
with view of developing
a prevention plan
depending on
nature/type of breach
(i.e. isolated or
systemic)
ppears to involve
ft/criminal ti it
ft/ i i l activity
ify the police
What individuals were
affected by the breach?
What is the foreseeable
harm that could result
from the breach?
(2) When/How/Who
Should Notify; and
(3) Content of
Notification
N tifi ti
97. Privacy Breach Notification – PIPEDA
Penalties & Enforcement
No penalty under PIPEDA for actual failure to follow guidelines
p
y
g
However, Federal Privacy Commissioner has power to investigate
derlying breach
S.14 ll
S 14 allows a complainant, after receiving C
l i
t ft
i i Commissioner’s report, t apply
i i
’
t to
l
Federal Court for a hearing of complaint
Available remedies include order to correct practices, publish notice of
tion taken/proposed to correct practice and damages
ti t k /
dt
t
ti
dd
98. Privacy Breach Notification – PIPEDA
Damages Under PIPEDA
Until the recent case of Nammo v. TransUnion of Canada Inc., 2010 FC
84., there was no precedent for an award of damages under PIPEDA
Court awarded damages of $5,000 to complainant
Principles to consider when awarding damages: compensation, vindication,
d deterrence
Court stated:
…both th question of whether d
b th the
ti
f h th damages should b
h ld be
awarded and the question of the quantum of damages
should be answered with regard to whether awarding
damages would further the general objects of PIPEDA
and uphold th values it embodies. F th
d
h ld the
l
b di
Furthermore,
deterring future breaches and the seriousness or
egregiousness of the breach would be factors to
consider
99. Privacy Breach Notification – PIPEDA
Federal government proposals to amend PIPEDA to include mandatory
each notification
Bill C-29 (May 2010) died on table
C 29
Bill C-12 (September 2011) did not move forward
Bill C-475: An Act to amend the Personal Information Protection and
ectronic Documents Act
• mandatory breach reporting to the Commissioner
• power to make compliance orders
• first reading February 26, 2013
100. Privacy Breach Notification – FOIP
OIP
Reporting a breach under FOIP is voluntary
OIPC encourages voluntary privacy breach reporting
Public bodies regulated by FOIP can report a privacy breach to OIPC
the f
following ways: (i) verbally, ( ) by letter, or (iii) by the Breach
()
(ii)
( )
Report Form
ttp://www.oipc.ab.ca/Content_Files/Files/Publications/Breach_Report_Form_2010.pdf)
101. Privacy Breach Notification – FOIP
FOIP
• Government of Alberta is performing FOIP Act Review in 2013
• OIPC’s recommendation is to require public bodies to report
privacy incidents meeting certain criteria and giving OIPC the
power to require public bodies to notify affected individuals
individuals.
• Advocating for mandatory breach reporting similar to PIPA
• These measures have not been adopted by the Alberta legislature
to date
102. Privacy Breach Notification – HIA
HIA
Reporting a breach under HIA is not mandatory
p
g
y
OIPC encourages voluntary privacy breach reporting
Public bodies regulated by HIA can report a privacy breach to OIPC the
owing ways: (i) verbally, (ii) b l tt or (iii) b th B
i
b ll
by letter,
by the Breach R
h Report F
t Form
tp://www.oipc.ab.ca/Content_Files/Files/Publications/Breach_Report_Form_
10.pdf)
103. Privacy Breach Notification – HIA
On January 23, 2014, OIPC Commissioner launched investigation into
edicentres privacy breach incident
name,
birth,
numbers,
• laptop containing name date of birth provincial health card numbers
billing codes and diagnostic codes stolen September 2013
• affects 620,000 Albertans
• laptop belonged to IT consultant
• Health Minister requested Commissioner to investigate breach in January
22, 2014
Investigation to include broad review of privacy breach reporting in the
alth sector
OIPC Commissioner advocating for introduction of mandatory breach
porting for HIA
104. Recommendations
developing a set of policies and accompanying procedures, organizations
ould take the following steps into account:
develop comprehensive security program to protect confidentiality integrity and
confidentiality,
availability of information, not just personal information
develop data classification standards that identify personal information
conduct risk assessment of personal information to ensure proper security controls
d t i k
t f
li f
ti t
it
t l
(i.e. Authentication, encryption) are in place to protect these information assets
develop policy for handling security breaches and ensure that it is updated periodically
to reflect modern technologies and circumstances
incorporate into the policy a step that requires a report to the Privacy Commissioner of
y serious data breach
ensure third party service contracts expressly require third party to immediately inform
organization of any possible or suspected breach
Ensure employees of the corporation are aware of, and in compliance with,
p
p
g
p yp
anization’s policies and practices relating to third party personal information
105. MENTAL ILLNESS IN THE WORKPLACE
y: David J. Corry, Q.C.
go
innovation
beyond
results
borders
value
106. MENTAL ILLNESS –IMPACT ON THE WORKPLACE
Mental health problems and illness account for 30% of the
disability claims in Canada.
In some sectors it rises to 50% of disability claims
claims.
Organizations with the most effective health and productivity
programs have:
•
•
•
•
Greater revenue per employee (18% more)
Lower medical claims & costs
Fewer absent days per employee; and
y p
p y ;
Greater shareholder returns (40% higher)
wers Watson, 2012 12 Staying@Work Report online:
2012-12
ww.towerswatson.com/assets/pdf/6031/towers-watson-staying-at-workport.pdf#>
107. OUTLINE
. Overview of legal issues
. Human Rights and Duty to Accommodate
. Wrongful Dismissal
. WCB
C
. Occupational Health & Safety
108. HUMAN RIGHTS
Employers prohibited from discrimination
because of mental disability
Employers must accomodate mentally ill
employees unless it amounts to undue
hardship
109. UNION CASES (COLLECTIVE AGREEMENT)
Saint John Shipbuilding (1993), 26 L.A.C. (4th)
361 (N.B. – MacLean)
•
•
•
•
Employee dismissed after threat to supervisor with a
gun
Grievor h d personal and emotional problems
Gi
had
l d
ti
l
bl
resulting in panic attacks
ea o supe so connected o employee’s
Threat to supervisor co ec ed to e p oyee s
mental illness
Conditional reinstatement ordered
110. UNION CASES (COLLECTIVE AGREEMENT)
Calgary Co-operative Assn. and Calco Club
(1992), 24 L.A.C. (4th) 308 (Alta. - McFetridge)
•
•
•
•
Employee dismissed following inappropriate
treatment of customers
Connection b t
C
ti between employee’s b h i
l
’ behaviour and
d
frontal lobe brain damage
o
o
until a e termination
after e
a o
Not known u
Employee reinstated with back pay
111. UNION CASES (COLLECTIVE AGREEMENT)
Sealy Canada Ltd. And U.S.W.A, Loc. 5885
(2006), 147 L.A.C. (4th) 68 (Alta. – P.A. Smith)
•
•
•
•
•
•
Assault on co-worker and plant manager
Previously undiagnosed bi-polar disorder
Conduct non-culpable; not deliberate nor intentional
Discharge not meeting just cause standard
Employer aware of disorder after termination but
termination,
failed to accommodate grievor
p g
g g
y
Positive prognosis for managing disability –
reinstated
112. UNION CASES (COLLECTIVE AGREEMENT)
York Region Bd. of Education (1999), 84 L.A.C.
(4th) 90 (Ont. - Shime)
•
•
•
•
•
Teacher with bi-polar disorder stopped taking lithium
against Psychiatrist advice
Inappropriate behaviour t
I
i t b h i
toward students, t
d t d t teachers,
h
parents and supervisors
Cause for d sc p e Author o o
o discipline. u o of own misfortune for
so u e o
going off lithium
However, no cause for discharge
As teacher’s behaviour irreparably undermined
employment – awarded 6 months damages in lieu of
reinstatement
113. NON-UNION CASES (HUMAN RIGHTS ACT)
Warren v. West Canadian Industries Group Ltd.
2007 AHRC 3
•
•
•
•
•
•
Short service employee (1 year)
Employee diagnosed with chronic depression, PTSD (post
traumatic stress disorder)
)
Borderline personality disorder and agoraphobia
Interactions with some employee’s resulted in stress & anger
Behavioural issues and absences should have triggered a
follow-up with employee/doctor re: mental illnesses
Employer has a duty to inquire
114. NON-UNION CASES (HUMAN RIGHTS ACT)
•
Panel stated at paragraph 193:
Mental illness is one of the least understood and least
accepted of all illnesses.
It creates fear and
stereotypical responses in people. Yet who are the
mentally ill? Potentially they can be people who suffer
from varying degrees of illness, from short term
situations that temporarily incapacitate an individual to
long term illnesses that require continuous support and
g
q
pp
attention. Psychiatric disabilities have many possible
causes, sometimes physical, sometimes psychological
and sometimes social. For a great many people, such
illnesses are shameful and embarrassing and as a
result they are very reticent to stand up for their rights
or to protest when injustice has been done to them.
115. NON-UNION CASES (HUMAN RIGHTS ACT)
Lane v. ADGA Group Consultants Ltd. 2007
HRTO 34
•
•
•
•
•
•
Employed 8 days.
Bi-polar disorder reported to supervisor and employee warned
his supervisor that his behaviour in the workplace should be
p
p
monitored.
Mental illness not disclosed prior to hiring.
Dismissed due to inability to do the job
job.
Hospitalized for 10 days after dismissal.
(Manic state
triggered by 2 CF-18 fighters flying over the house.)
Employee discriminated against – damages of $80 000
$80,000
awarded.
116. WRONGFUL DISMISSAL
Yeager v. RJ Hastings, [1985] 1 WWR 218
(BCSC)
•
•
•
•
•
30 year employee, 2 I/C, shareholder.
1980 – misdiagnosis – incurable organic brain disorder.
Last 3 years of employment – progressively worse –
occupationally disabled – abandoned employment.
Court held that 2 year period of disability did not frustrate
contract of employment
employment.
Awarded damages for wrongful dismissal based on 18 months
notice.
117. SUMMARY
dealing with employees who are potentially
entally ill:
•
•
•
Behaviour may trigger duty to inquire with employee/doctor(s)
as to whether employee has mental illness.
If disruptive in workplace – put employee on STD or paid LOA
p
p
p
p y
p
until you have necessary information.
Gather evidence to determine:
•
•
•
•
•
•
Any underlying mental disability
What accommodation is necessary
Benefits entitlement
Appropriate course of action
Legal obligations, risks, recommendations
Retain disability management/medical expertise as required.
118. WORKERS COMPENSATION (WCB)
If mental illness arises from the workplace – may be a
compensable claim under WCB.
Alberta WCB Policies – Policy: 03-01 Part II Psychiatric
or Psychological Injury.
e: www.wcb.ab.ca
If possible claim – file Notice of Claim and encourage
employee to file claim
claim.
Lawsuits against employer are subject to statutory bar
pursuant to s. 23 of Workers Compensation Act.
119. OCCUPATIONAL HEALTH & SAFETY
Employers, contractors and workers jointly obligated to
ensure a safe workplace.
Specifically, employers, contractors and workers must
prevent violence and psychological injury to workers.
Occupational Health and Safety Act, s. 2
p
y
Part 27 of Alberta Occupational Health & Safety Code
e: Workplace Health and Safety Bulletin: Preventing Violence and
rassment at the Workplace
Employers obligated to develop and implement plan to
minimize violence in the workplace
workplace.
Most cases of workplace violence involve a mentally ill
employee.
120. OCCUPATIONAL HEALTH & SAFETY
hen dealing with mentally ill employee:
Dismissal is a last resort and usually makes matters
worse.
•
•
•
•
Increases legal risk and exposure.
Lose touch with employee and may trigger greater
symptoms/behaviours associated with mental illness (eg.
violence, depression, suicide).
Prevents
P
t
effective
ff ti
disability
di bilit
management
t
and
d
accommodation of employee.
Prevents employee access to disability and other
employment benefits (when they need them most).
121. OCCUPATIONAL HEALTH & SAFETY
est course of action:
If necessary, place employee on paid LOA pending
investigation of all necessary f t
i
ti ti
f ll
facts.
Retain disability manager or medical expertise as required.
p y
g
Have employee sign medical consent to release information
to management who “need to know”. (Comply with Personal
Information Protection Act and Health Information Act, as
applicable).
Once all relevant information obtained, including medical
information determine:
•
•
Whether duty to
Wh th d t t accommodate, and if so, options available
d t
d
ti
il bl
Discuss and enter into written accommodation agreement with
employee
122. OCCUPATIONAL HEALTH & SAFETY
With consent of employee, advise other employees who
“need to know” and ensure that they participate in
accommodation.
accommodation
Follow-up regularly to ensure accommodation is working for
all parties.
Before employee returns to work – ensure an adequate
fitness to work assessment is done and released to
management on a “need to know” basis.
Assist employee in applying for employment benefits (where
appropriate).
Seek and follow legal advice to minimize legal risk and
liability
123. OCCUPATIONAL HEALTH & SAFETY
If continued employment not viable, then “without prejudice”
package should be offered in exchange for general release.
Take pro active steps to promote psychological health and
pro-active
safety in the workplace. It deserves the same priority as
physical health and safety.
124. ontact Information
avid J. Corry, Q.C.
el: 403-298-1812
mail: david.corry@gowlings.com
mail da id corr @go lings com
