Get the latest on layoffs, class action suits, employee entitlements, and interview questions. We recently spoke with employment lawyer Danny Bernstein, partner at Roper Greyell LLP. He gave us pertinent information on all of this and more.
Pressed for time? Skip ahead.
S1: Employer Protection While Preparing for Layoffs
S2: Class Action Suits Against Employers
S3: Employee Entitlement Interpretation Trends
S4: Which Questions are Appropriate to Ask In Interviews?
S1: Employer Protection While Preparing for Layoffs
GB: There’s a lot of economic uncertainty at this time. What advice would you give employers who fear they may need to lay employees off in the near future?
DB: What we learned during the pandemic is that a lot of employers are not properly set up to implement significant workforce reductions. If companies need to downsize quickly, that’s generally achieved through temporary layoffs.1
Rules differ by province, but generally speaking, a temporary layoff is no more than a certain number of weeks—13 in British Columbia. Employees are unpaid during that period. If they’re not recalled by the end of the temporary period, then the employment is deemed to be terminated. Then you get into issues of severance owing and so on.
But the BC Employment Standards Act doesn’t actually create an entitlement for employers to make temporary layoffs. It does create protections around the layoffs for employees, but our courts have said that it can be a constructive dismissal to lay someone off without pay, unless you have a contractual ability to do that, or it’s part of an industry standard or company policy.
GB: What do you mean by ‘part of an industry standard’?
DB: In a typical office job, for example, people come in from nine to five, five days a week, all year long. They don’t expect to get sent home – that isn’t ‘industry standard’.
In other industries, layoffs are cyclical. Ski instructors, for example, work for a season and are then sent home. Agriculture and forestry are other examples. You don’t necessarily need contractual provisions in those industries because layoffs are expected—they’re already part of the role.
One of the key lessons we learned post-COVID is that employers who previously never considered layoffs—or didn’t include them in employment terms—should have a clause in their contracts or a policy allowing for temporary layoffs. We now expect the unexpected, and advise our clients to incorporate this language into their contracts.
GB: The pandemic caused a lot of layoffs. How did those cases play out?
DB: A lot of times, the employer would get agreement from the employee before the layoff. If it’s a mutual agreement, then it isn’t being imposed as a unilateral action. Perhaps you offer to extend benefits or other aspects of employment during the layoff.
GB: As an employee, why would I be inclined to agree to this?
DB: You might like your job. During the pandemic, we expected mass claims of terminations. We didn’t expect people to accept temporary layoffs, but they did. I think there was a general acceptance among the workforce that we’re all in this together and that if we all sue the company, the company might close, and they won’t have a job to come back to. They’d rather have a few weeks off and return to work.
As an employee, if you quit and claim constructive dismissal due to a layoff, you can’t be recalled because you won’t be employed anymore. And you may have to go through a dispute process in order to get a severance package.
GB: What should employers do to prepare now if they expect layoffs may be imminent?
DB: If layoffs are imminent and you don’t have good contractual language or policy, then you have to rely on the goodwill you have with your workforce. Early communication can help, although it can have its own negative consequences if you scare the workforce. But having good employee relations, openness, transparency, and building trust are going to help you get agreement from your workforce. If you have those conversations, you want people to believe you. But certainly for any new hires and promotions, you’ll want to include the right language in the employment contract.
S2: Class Action Suits Against Employers
GB: The Federal Court of Canada has ruled that a class action lawsuit against the federal government, alleging that federal employees’ rights were violated by the government’s mandatory vaccination policy, can move ahead. What can you tell us about such class action lawsuits? Should private companies fear something similar?
DB: I don’t know the specifics of that case, but there are sometimes class action lawsuits by groups of employees against their employer for alleged breaches that affected the whole group.
Before any actual determination of the merits of the lawsuit can go ahead, the court must first certify the class. They’ll determine if there are enough common issues among the employees that it makes sense to try the matter as a class rather than individually. Has everyone been wronged in a sufficiently similar way that if you decide one of them, you decide the majority of them? A class action does mean that everyone who has a grievance with their employer can just get together and bring a class action suit, if the issues are different.
GB: What about a group that was collectively sent home from work because they didn’t have a vaccination? Is that a class?
DB: Potentially. Class actions often happen with issues such as overtime—if there’s a claim that an employer failed to follow the rules over a long period of time. There have been banks involved in overtime class actions around who is considered a manager, for example.
The big legal hurdle for the plaintiffs is getting the class certified. Often, if the court determines that it is appropriate to proceed as a class, there will be a settlement.
S3: Employee Entitlement Interpretation Trends
GB: During our last legal update, we spoke about the interpretation of employee entitlements, specifically how Ontario courts are trending ever further in favor of employees. Are you still seeing this?
DB: It’s a hot topic. We are getting new cases where the court has either upheld or struck down language that limits an employee’s entitlements on termination, on a near-weekly basis.
In Ontario, it’s continuing to trend in favor of employees. It’s getting harder and harder for an employer to enforce restrictive termination language. So the need to be careful with drafting is ever-growing.
GB: Help me understand how such ‘legal trends’ materialize. Has the letter of the law changed, or simply the interpretation of the law?
DB: It’s certainly not a change in the law but a gradual shift in perceptions and interpretation of what the law says. I’ll acknowledge that there have been some clever arguments from plaintiff counsel trying to find ways to strike down termination language.
If these new arguments are successful, the next person will then come along and make the same pitch, which can gain traction. That’s what’s happened in Ontario, where we’ve had some longstanding legal notions around contractual interpretation shift in the past few years (in my opinion).
GB: Why do you think lawyers are putting such effort into creating this shift?
DB: I think that, in a lot of cases, the juice is worth the squeeze. Often you’re talking about the difference between someone getting the minimum entitlements under the Employment Standards Act vs common law reasonable notice, which can be multiples higher.
Furthermore, we see a lot of high-value incentive compensation policies and plans where termination impacts bonuses, commissions, or incentive payments. If an employee can argue they are entitled to common law reasonable notice, they may be entitled to the incentive payments that would have occurred during this reasonable notice period, whereas if they only get the Employment Standards minimums, often they won’t be entitled to the incentive payments. These cases can be worth millions of dollars and are therefore worth litigating for both parties.
GB: Do you anticipate B.C. courts following Ontario’s lead with these interpretations?
DB: So far, we’ve had cases where the BC Supreme Court has refused to be as restrictive in its interpretation of termination clauses. There are a lot of employment lawyers here who would love to change that, but with my management-side lawyer hat on, I hope it stays the same.
S4: Which Questions are Appropriate to Ask In Interviews?
GB: Last time we also briefly touched upon employers who ask inappropriate questions during job interviews. I understand that you have prepared some more extensive advice for employers in this regard.
DB: Yes. I want employers to understand that human rights protections don’t just exist for employees, but for job applicants also. You can get yourself in trouble even before the employment relationship begins if the questions you ask during the interview are discriminatory.
GB: So employers should carefully consider the questions they intend to ask during interviews?
DB: Yes, and it’s not just questions that are being specifically asked, but the conversation in general. For example, if I’m interviewing you and I start talking about my family, you’ll most likely start talking about yours. It’s not that I asked you about it, but now that information has come up and the question becomes, what am I going to do with that information? WIll it be considered in making hiring decisions? Will the applicant have a perception that it was considered?
GB: What are the ramifications of such situations?
DB: If somebody doesn’t get a job, they might perceive that such information was the reason. It’s quite possible that they didn’t get the job because there was another candidate who was more qualified, but in their mind it might be because they disclosed that they have a disabled family member, or because they told you that they were considering starting a family. Or because English is their second language. An employer can then find itself in the position of having to defend its decision in a human rights complaint, and prove that those protected characteristics had nothing to do with the decision.
Another way this comes up is when the candidate does get the job, it could come up again later if they’re passed over for a promotion, or if they get disciplined.
GB: How can employers get the information they need without wading into troubled waters?
DB: They should carefully consider the actual requirements of the job and the framing of the questions.
For example, if the job requires a candidate to regularly lift over 50 pounds, don’t ask them if they have a disability that prevents them from doing so.
If the job requires frequent travel, don’t ask if they have a young family who needs them home each night, ask if they’re able to travel.
Don’t ask if they have noisy kids at home, ask if working from home poses a problem.
It’s a matter of framing the question correctly.
It’s also a matter of really knowing what the job requires. This is often referred to as “bona fide occupational requirements”. If the job only requires a basic proficiency in English, it’s not a bona fide occupational requirement that English is their first language or that they have excellent grammar.
Again, it’s assessing the core requirements of the job and gathering that information in a way that allows the employer to make a reasoned decision, and that recognizes its human rights obligations.
GB: Do you think that most employers are improving in this regard?
DB: I think it’s become much less likely that employers will ask obviously inappropriate questions, like whether a candidate intends to become pregnant or has any medical issues. I think those days are pretty much gone, although perhaps not entirely. Employers are becoming more familiar with their obligations. Where there is still improvement to be made is in only asking questions that test the core requirements of the job, asking them in an appropriate way, and asking these consistently across all candidates.
Cited Sources
1 Direct communication with Danny Bernstein
