Minimum wage applies to all employees regardless of how they are paid-hourly, salary, straight or partial commission basis or other incentive basis. As of November 1, 2011, the second of a three-stage increase in the minimum wage in British Columbia to $9.50 per hour took effect. At the same time, the new minimum wage rate of $8.75 per hour took effect for employees who serve liquor directly to customers in premises licensed to sell liquor under the Liquor Control and Licensing Act.

The third increase that will bring the general minimum wage to $10.25 per hour and the liquor-server wage to $9.00 per hour is due to take effect on May 1, 2012.

It should also be noted that effective May 1, 2011, the First Job Wage, colloquially referred to as the “training wage,” was repealed and all hourly-paid employees are now entitled to the general minimum wage, regardless of how long they have been engaged in the paid labour force.

Proportionate to the increases in the minimum wage rate, the British Columbia government also increased the non-hourly rates paid to live-in home support workers, live-in camp leaders and resident caretakers and also raised the piece rates for hand-harvested crops.

For more details on minimum wage changes please see the B.C. government’s website at http://www.labour.gov.bc.ca/esb/facshts/min-wage.htm

Tags: minimum wage, salary, training wage

The issue of employees’ misusing company computers is commonplace.  In 2000, Xerox was monitoring all of its 92,000 employees’ computer usage and terminated 40 employees in the United States for accessing pornography on work time[1].  Similarly, the luxury automobile company, Rolls Royce, suspended 14 employees for inappropriate use of the work internet computers[2].  Closer to home, the RCMP very recently suspended a long-standing officer for adult material found on his work computer[3].

Yet, despite the frequency of these events, there remains very little case law in British Columbia on the subject of spyware surveillance.  Largely the issue is raised in an arbitration context in union employment, for which there are distinguishing factors such as provisions in the collective agreements that address the subject.

On the legislative front, however, the applicable law on the subject is found in the Personal Information Protection Act[4] (“BCPIPA”).  The BCPIPA, it should be noted, has been ruled substantially similar to its federal counterpart, the Protection of Personal Information and Electronic Documents Act (“PIPEDA”). Therefore, the BCPIPA supersedes in British Columbia.  It is also noteworthy that the BCPIPA, unlike the PIPEDA, is not restricted to public works; it applies instead to “all organizations” (s. 3).

Also noteworthy in the BCPIPA is an interesting clause, section 13, concerning the collection, use and disclosure, without consent of employee, personal data that essentially states that consent is not required for reasonable collection of information, so long as notification is given.  Section 13 reads, in part:

COLLECTION OF EMPLOYEE PERSONAL INFORMATION

13

(1) Subject to subsection (2), an organization may collect employee personal information without the consent of the individual.

(2)    An organization may not collect employee personal information without the consent of the individual unless

…

(b)    the collection is reasonable for the purposes of establishing, managing or terminating an employment relationship between the organization and the individual.

(3)    An organization must notify an individual that it will be collecting employee personal information about the individual and the purposes for the collection before the organization collects the employee personal information without the consent of the individual.

The onus is on the employer to establish that the personal information it is collecting about its employees, through installation of monitoring software on the company-owned computers, is “reasonable for the purposes of establishing, managing or terminating an employment relationship between the organization and the individual”.  Moreover, the employer is required to “notify” the employee, in advance, that it will be collecting employee personal information [S.13 (3)].

An example of where the employer was found to have violated the statute with its spyware surveillance is Re University of British Columbia[5].  In that case, the university had a policy that allowed some incidental personal internet usage so long as it did not interfere with an employee’s work.  However, the university suspected a particular employee was spending too much time on personal internet usage and investigated by placing spyware on the employee’s computer.  The results led the university to terminate the employee, which led to wrongful dismissal arbitration.  The Privacy Commission held that the university had acted unreasonably, particularly in not first warning the employee about the impugned behaviour, and in violation of the notice requirements of the Act.  The Commissioner came short of ordering the evidence inadmissible at the arbitration, but strongly suggested that using such evidence was inappropriate and would undermine the privacy legislation in place.

[1] http://www.theregister.co.uk/2000/07/15/xerox_fires_40_in_porn/

[2] http://www.theregister.co.uk/1999/05/05/rollsroyce_emailers_jobs_still/

[3] http://www.theprovince.com/Senior+Mountie+docked+sexy+videotapes/5621049/story.html

[4] SBC 2003, c. 63

[5] 2007 CanLII 42407 (BC IPC)

Tags: invasion of privacy, Privacy, privacy act, spyware, surveillance

In British Columbia, the Privacy Act (“Act”) enacted in 1968 was the first in the country.  It created a statutory tort or civil right of action for an invasion of privacy when the common law did not.  Section 1 of the Act reads:

Violation of Privacy Actionable

1 (1) It is a tort, actionable without proof of damage, for a person, wilfully and without a claim of right, to violate the privacy of another.

However, the right of privacy is not absolute, as sections 1(2) and 1(3), together, create a scheme that protects only a certain degree of privacy.  These provisions establish a two-step process to successfully advance a claim under the Act.

Under the first step, a person must establish that the claim of privacy is “reasonable in the circumstances” (s.1(2)).  The Act does not define privacy.  Instead, the Courts have adopted their own definition that it is, “(t)he right to be let alone, the right of a person to be free from unwarranted publicity”[1].

The Court has identified four types of privacy interests to be protected[2]:

1. Intrusion upon a person’s seclusion or solitude, or into his private affairs;
2. Public disclosure of embarrassing private facts about the person;
3. Publicity which places the plaintiff in a false light in the public eye;
4. Appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness.

Perhaps the most important “circumstance” in determining whether the claim to privacy is reasonable, is the nature of the person’s location at the relevant time[3].  For instance, a person has a more reasonable expectation of privacy in their bedroom, than they do on the sidewalk.  In the workplace, there may be a similar difference between an employee’s break area and their work area.  However, while the location is significant, it does not override any other circumstances.  The courts have found a reasonable expectation of privacy despite being in a public location[4].

Under the second step of the test, the Court must consider the “nature, incidence and occasion of the act” and the “relationship between the parties” to determine whether the infringing act is a violation of that privacy.

A specific requirement is that a violation be done “wilfully” and without claim of right[5].  The word “wilfully” is narrowly interpreted to mean that the person must not only have intended to do the alleged act, but also that the person knew or should have known that their act would violate the victim’s privacy[6].  The term “claim of right” means that there must be at least an honest belief in the existence of a state of facts which, if it actually existed, would at law justify or excuse the act done[7].

The Act further circumscribes the scope of “violation” in section 2(2), by deeming specific acts as not violations, which include[8]: acts done with consent; acts incidental to defending one’s person or property; acts authorized by law, court process or court order; and publications that are of public interest or are fair comment on a matter of public interest.

Although the Act creates a potential liability to employers for breach of privacy, the statutory scheme has established several potential defences.  Further, and quite notably, the Act does not necessarily preclude relying on evidence collected in breach of the Act.  The Court has stated that video surveillance of an employee, whether it breached the Act or not, may be used in evidence of the employee’s termination[9].  Similarly, the Privacy Commissioner, in University of British Columbia (Re), 2007 CanLII 42407 (BC IPC) in dealing with the counterpart privacy legislation, the Freedom of Information and Protection of Privacy Act (“FIPPA”), restricted her order so as not to preclude evidence gathered by the employer, using a spyware to surveil an employee, from being used in the arbitration of the employee’s dismissal[10].

[2] Heckert v. 5470 Investments Ltd., 2008 BCSC 1298, para. 73.  These four categories were also described as solitude, intimacy, anonymity and reserve by the author in A Preliminary Exploration of Workplace Privacy Issues In Canada, Vance Lockton and Richard S. Rosenberg, April 10, 2006, http://www.cs.ubc.ca/~lockton/workplace.pdf, at pg. 6.

[3] Silber et al. v. British Columbia Television Broadcasting System Ltd. et al., 25 D.L.R. (4th) 345, para. 18

[4] Heckert, supra., para. 81

[5] Section 1 of the Act.

[6] Hollinsworth v. BCTV 1998 CanLII 6527 (BC CA), (1998), 59 B.C.L.R. (3d) 121 (C.A.), at para. 29

[7] Hollinsworth, supra., at para. 13, see also Davis v. McArthur, 10 D.L.R. (3d) (BCSC) (overturned on other grounds)

[8] Section 2(2) and (3) of the Act.

[9] Richardson v. Davis Wire Industries Ltd., 1997 CanLII 4221 (BC SC) at para. 48

[10] University of British Columbia (Re), 2007 CanLII 42407 (BC IPC)

Tags: employment law, invasion of privacy, monitoring employee, Privacy, privacy act, tort

If you are an employer and you have made an overpayment to your employee, whether or not that overpayment was “wages” or benefits, can you unilaterally deduct that overpayment from the employee’s wages?

Section 21 of the Employment Standards Act (“ESA”) provides that “an employer must not, directly or indirectly, withhold, deduct or require payment of all or part of an employee’s wages for any purpose”, unless it is permitted or required by any enactment of British Columbia or Canada.  “Any purpose” in section 21 includes the scenario where the employer wants to deduct an employee’s wages to recoup overpayments made to an employee.

However, where the deduction is for something that is permitted by an enactment of British Columbia or Canada such as income tax; Employment Insurance premiums or Canada Pension Plan contributions then the employer is allowed to make a deduction without the employee’s consent.

Also, section 22 of the ESA identifies several instances in which the employer may, as a result of the written assignment by the employee, deduct wages from the employee’s wages. Section 22 states:

Assignments

22

(1) An employer must honour an employee’s written assignment of wages

(a) to a trade union in accordance with the Labour Relations Code,

(b) to a charitable or other organization, or a pension or superannuation or other plan, if the amounts assigned are deductible for income tax purposes under the Income Tax Act (Canada),

(c) to a person to whom the employee is required under a maintenance order, as defined in the Family Maintenance Enforcement Act, to pay maintenance, and

(d) to an insurance company for insurance or medical or dental coverage.

…

(3) An employer must honour an assignment of wages authorized by a collective agreement.

(4) An employer may honour an employee’s written assignment of wages to meet a credit obligation.

How is the employer then to recoup overpayment of wages to an employee? In HEABC V. B.C. Nurses’ Union[1], the Court of Appeal, in upholding an arbitrator’s award declaring that the employer in that case was prohibited from unilaterally recovering overpayment of wages from the wages of its members, stated that the employer:

“ is still able to recover overpayments from employees where that employee agrees to the deductions, or where a statute or collective agreement expressly authorizes the employer’s unilateral action. Where no such agreement or statutory authorization exists, the employer has the option of recovering overpayments in other ways such as pursuing a grievance, or bringing a claim against the employee.”

Therefore, it is advisable that an employer tries to obtain an employee’s express written authorization or consent to deduct the latter’s wages to recoup any overpayment.  If the employer is unsuccessful in obtaining the employee’s written authorization, the employer may proceed with a debt claim against the employee in the provincial (small claims) court assuming the overpayment is under $25,000. If the employer is unionized, the employer may be able to pursue the claim by lodging a grievance application.

[1] [2005] BCA 343

Tags: assignments, deduction, employment relationship, employment stadards act, overpayment, unpaid, wages

Businesses engaged in a single undertaking may, in the interest of minimizing their legal risk or tax planning, conduct their business using separate legal entities. For example, a business may hold its assets in one corporate entity but hire and pay employees using a separate corporate entity that does not hold any assets or has only very limited assets. Rarely, if ever, will the employee have any say in how the business organizes itself or what corporate entity it will hold its assets in. While this may leave the employee vulnerable if she is employed by the corporate entity that does not hold assets if she needs to pursue the latter for outstanding wages or termination pay, common law and employment standards statute offer some protection to the employee in such case.

At common law, the common employer doctrine allows the court to treat separate legal entities, in appropriate cases, as a single employer for the purposes of attaching liability for such things as outstanding wages or termination or severance pay. In Sinclair v. Dover[1], the BC Supreme Court delineated the following justification for common employer determination:

As long as there exists a sufficient degree of relationship between the different legal entities who apparently compete for the role of employer, there is no reason in law or in equity why they ought not all to be regarded as one for the purpose of determining liability for obligations owed to those employees who, in effect, have served all without regard for any precise notion of to whom they were bound in contract. What will constitute a sufficient degree of relationship will depend, in each case, on the details of such relationship, including such factors as individual shareholdings, corporate shareholdings and interlocking directorships. The essence of that relationship will be the element of common control.

In British Columbia, the common employer doctrine has been codified in section 95 of the Employment Standards Act (“ESA”):

Associated employers

95 If the director considers that businesses, trades or undertakings are carried on by or through more than one corporation, individual, firm, syndicate or association, or any combination of them under common control or direction,

(a) the director may treat the corporations, individuals, firms, syndicates or associations, or any combination of them, as one employer for the purposes of this Act, and

(b) if so, they are jointly and separately liable for payment of the amount stated in a determination, a settlement agreement or an order of the tribunal, and this Act applies to the recovery of that amount from any or all of them.

The legislative objective underlying section 95 is the same as the justification of the common employer doctrine at common law; namely, to protect the employees and ensure their “wage claims are not defeated by niceties of legal form”.

In a recent decision, the Employment Standards Tribunal, after comprehensively reviewing both court and Tribunal decisions, delineated the following, non-exclusive criteria or considerations when determining if two or more entities are common or associated employers under section 95 of the ESA:

• There must be at least two separate entities that are being “associated”;
• The nominal employer is not particularly relevant and there is no need that a formal contract of employment subsist as between the employee and the entities that are being “associated”;
• The entities must be jointly carrying out some business, trade or other activity although the business, trade or activity in question need not necessarily be the only one that each entity is carrying on;
• “common control or direction” may be determined based on financial contributions from one entity to another (although this factor, standing alone, is not determinative); the fact that one entity is economically dependent on another entity, interlocking shareholdings and directorships; common management principals (e.g., corporate officers and other key employees): sharing of resources (including human resources) among the various entities; asset transfers at non-market transfer prices; operational control by one entity over the affairs of another entity; joint ownership of key assets and operational integration.[2]

If you are or contemplating to operate a business through two or more separate legal entities, particularly with a view to curtailing or minimizing the exposure of one or another of your legal entities from legal liability, it is important that you understand what will constitute indicia of associated or common employer so that you do not inadvertently expose yourself to a common or associated employer determination under the ESA or at common law. Conversely, if you are an employee of an impecunious company and owed wages or termination pay that you cannot collect from the company, you may want to investigate if there is any basis at law to properly associate the company with another related company with a view to obtaining a common employer or associated employer determination to successfully collect on your claim. You may also want to consider lodging a claim under section 96 of the ESA, which makes directors, and officers of a corporate employer personally liable for up to two months unpaid wages. Section 96 is the subject of a separate article in our Business Blog.

[1] 1987 CanLii 2692,

[2] Re: 0708964 B.C. Ltd., BC EST #D015/11

Tags: associated employer, common employer, director liability, employment relationship, legal risk, seperate legal entities, termination, unpaid wages