Business Leaders’ Quarterly Briefing: Canadian Employment and Immigration Law

Updating business managers with what you need to know, right now.

Pressed for time? Skip ahead:

Employment Law with Blair Curtis

• S01:01 COVID-19 legal action trends
• S01:02 Employment law case makes it to the Supreme Court
• S01:03 Bonuses owed during termination
• S01:04 Employer’s obligations around mental health
• S01:05 New working structures
• S01:06 Factoring for Force Majeure

Immigration Law with Stanley Leo

• S02:01 Trends in Canadian jobs-based immigration
• S02:02 Hiring employees without them immigrating
• S02:03 Who is putting in the effort for permanent work status – Employer/Employee
• S02:04 What jobs are easier to hire for from outside the country
• S02:05 BC specific immigration updates
• S02:06 NDP majority predictions
• S02:07 Business immigration investment

Interview with Blair Curtis, Lawyer at Tevlin Gleadle Curtis

2020 has posed legal questions for employers and employees alike. Working from home, terminations, prorated bonuses, Supreme Court cases, government support, mental health, and force majeure have all been top of mind. Employment lawyer Blair Curtis of Tevlin Gleadle Curtis in Vancouver was kind enough to provide us some clarity from the legal side of the employment world.

S01:01

GB: As the world gets used to operating during a pandemic, have COVID-19 related inquiries slowed down at your office?

We had a run on giving Covid advice in March and April; it seemed like it was all anyone wanted to talk about and we understood that. I think it might have been six weeks since anyone’s called me and asked me a Covid question. However, I am getting some employers calling me to say ‘Hey, pre-Covid we were thinking of updating our contracts, is there a clause that we should be putting in now to address things like pandemics? Act of God, frustration type of clauses in executive contracts? What types of events might cause the contract to no longer be on foot? If there’s a world pandemic and we can’t carry out business, is that something that should be addressed? Other than that, there are fewer inquiries about it.

S01:02

GB: Are there any recent employment developments, changes, rulings or applications that you thought were interesting?

The one that jumps out at me is Matthews vs. Ocean Nutrition Canada Ltd.. It’s particularly noteworthy for us in the employment law space, because it’s not that often that we actually have the Supreme Court of Canada take an employment law case.

GB: At issue was whether or not a dismissed executive was entitled to a bonus to be distributed during their notice period, after their termination.

The takeaway, which I think would definitely be important for both employers and executives to understand, is that there’s a huge amount of importance placed on how specific and how detailed the language is in the employment contract with regards to things like bonus policies.

The court in that case was urged to factor in all sorts of fairness and equity considerations, but it was apparent from the court’s analysis that they felt it was most important to focus on the wording of the contract, to see whether there was a fair case to be made that the employer had succeeded in excluding him from the bonus. Obviously, that was the employer’s argument: he’s gone, he doesn’t get it. The wording of the contract doesn’t say that he gets it. But I believe that they lost that case due to the court’s focus on whether the employer had made the language specific enough to make it clear that the employee shouldn’t have that compensation. Presumptively, if there’s a notice period owed, the usual default is that the person gets everything they would have gotten by working. The employer choosing to send them home doesn’t mean that they can then take away the things the employee would have got if they were working, unless it is really clearly specified in the contract or in the terms that govern the program, the bonus program, or otherwise.

The takeaway for employers is to thoroughly read through employment documents and, if they don’t jump out as being extremely clear, look to redraft them to make them clearer.

S01:03

GB: A bonus is usually paid out for past performance, right?

That’s exactly it so there are issues of timing, too. It’s rare that the timing works out to be exactly right. Lots of people are terminated part way towards earning a bonus already for that year. Also, if we agree that the person was entitled to six months notice, maybe that puts them part way into the next year, if you count those six months. There’s some interesting issues that we face in terms of prorating, too, and whether the court has a right to prorate as part of severance. That one is tricky and it’s not obvious a lot of the time.

GB: Are commissions totally different than bonuses?

It really can get tricky. When a person works on a deal for a long time which ultimately closes, then the commission is payable at a later point after all the profit is calculated. It’s pretty tricky if that person gets terminated. What happens if the deal gets closed a month after termination and then the profit gets calculated a month after that? I’ve had employers come to me and say “that person should get nothing, because in that last month, after their departure, we had to clean up a bunch of their mistakes in order to ensure that the deal was completed.” But then, of course, on the other side, the employee is saying “I did 90% of the work and I’m getting 0% of the dollars.” It’s tricky but, in general, what the court aims to look at is whether someone was owed a notice period as part of their termination, which most people would be unless it’s excluded by contract. The court tries to actually kind of crystal ball gaze and use whatever evidence is given to them to figure out what the person would have received in commission if they’d stayed through that period. So, basically, they try to construct that fictional event that the person had actually continued to work through that period. And we’ve seen that judges have been very specific in that, that’s what they’re supposed to try to do. Of course it’s tough, because then there’s all these arguments about “what if”.

GB: What if they did 90% of the work to close a deal, but then they engage in some sort of conduct that almost lost the deal and they were fired for that, but then the issue was fixed? You can make the case that if they’d kept working there, the company wouldn’t have won the deal.

Absolutely. Another twist that you see from time to time is, basically, “Frank, we fired you because you almost lost the deal and John had to come in and save the day. We had to pay John the commission to get him to straighten out your mess, so you’re getting nothing.” That’s an interesting one and it’s difficult to figure out exactly how a judge would do that. They’d have to determine what they thought was fair.

S01:04

GB: Mental health has been a big concern throughout this pandemic. Are there any issues that employers should be aware of with regards to working from home?

I’ve started to think about topics like WCB coverage. In most instances, your risk rates and so on are set by the nature of the work environment. Office WCB rates are much lower than factory WCB rates. I don’t know if that’s being majorly overhauled since so many people now are dispersed in environments that are less controlled. When your office reaches a certain size it is mandatory to have somebody who is trained on selected safety and first aid procedures. You lose that control when people work off-site.
Additionally employers want to continue to monitor workers from home, so they’re probably implementing software in order to monitor their computer usage and installing apps to make sure they’re actually working and not doing other things. There’s privacy issues. I think that there’s a lot of issues that arise from working from home that perhaps haven’t been fully sorted out yet.

GB: What about issues revolving around termination?

Certainly workers do have human rights protections if they are struggling with an illness or disability, whether it’s mental or physical. It’s not that the person can’t be terminated, but you can’t use that as any part of your consideration in making the employment decision. For instance, if you were downsizing your workforce by 10% and you say “I have a person who now has a diagnosed problem”. If it turned out that deciding who was going and who was staying was tied to that, that could be a human rights dispute.

GB: It would probably be hard to separate that.

It is, yeah.

S01:05

GB: Are there any questions being asked of you on a regular basis that are related to new problems arising from new working structures?

I haven’t had as many Covid related questions lately. Perhaps it’s because there are still a lot of supports that the federal government has put in place. It seemed like once that was all sorted, people were content to drift a little bit and see what happens.

However, there might be some fallout. I think that if a lot of those supports get pulled out, then people are going to have to really start facing the problems. I think that is coming. For instance, if people tried to defer the decision as to what to do with the workforce by just getting them to accept layoffs, or something like that, that has a limit to it. I think, for a lot of people, that limit is starting to approach right now, so unless there’s going to be another change to the EI program, they have to decide whether they can bring people back or whether they have to permanently let them go. That’s interesting timing because, in most parts of Canada, we’re going through a second wave that’s worse than the first. So, unless the governments do something to modify that timing problem, it’s a very bad time for employers to consider bringing back the people that they laid off in the spring. There has been some talk of extensions on some of these programs but I’m not aware that anything’s been locked in yet. It’s something that the governments have to consider.

For the most part, however, on both sides of the coin, when I’m dealing with dismissals in my practice, I would say the vast majority are proceeding just as they would have before Covid, in terms of what the employer recognizes its obligations to be and what the employee expects.

GB: Is force majeure a factor?

There are some employers out there that are trying to assert that Covid has changed the rules of the game. A couple in particular are taking the position that, because Covid happened, that is some sort of a force majeure or frustrating kind of event and they can let workers go and give them nothing. That will likely get tested in the courts, because I doubt that those employees are just going to accept that as the answer.

Force majeure has been tossed around a lot throughout Covid. It’s a really, really tough thing to make out as an employer and, frankly, the people I’ve seen try to assert it are not even in the best position to assert it. They’re just trying it on.

One of the problems that I think is going to happen is that it’s going to get tested in a case and then immediately, no matter which way that case goes, everyone is going to say, well that’s only in regards to that specific circumstance, right? For example, if it was tested in a restaurant case, that might actually succeed because they were subject to mandatory government shutdowns. Whereas the companies I’m seeing try to use it are the ones that used to make a 30% profit but now they’re only making a 10% profit and they believe that they should pay nothing. About which the courts are pretty clear, I don’t think they’re going to accept that at all.
Big venues or theatres or something, where now people are not even allowed to gather, would be interesting cases. I do see people trying to take advantage of ”Force Majeure”, or asserting an advantage of that, where there’s not that much of a legal basis for it. I think it’s going to have to be tested in court because it seems that employers are just not going to back down.

Interview with Stanley Leo, Lawyer at Lowe & Company

It goes without saying that a lot has changed this year and immigration was no exception. Travel restrictions caused a substantial drop in new immigrants forcing the Canadian labour market, which is largely dependent on newcomers, to adapt. As employment continues to increase, we asked Canadian immigration lawyer, Stanley Leo, of Lowe & Company in Vancouver, to weigh in on the current status of business immigration to Canada and what he predicts the future will look like.

S02:01

GB: What are the trends and current levels of human capital imports?

The restrictions of the COVID-19 world have caused a significant drop in new admissions this year for both immigrants and temporary residents entering Canada, whether as workers, students or visitors. As the Canadian government grapples with how to maintain productivity with the unforeseen rise of staff working remotely, processing times for most application types have only been increasing. Currently, the main source of new admissions to Canada are essential workers and non-essential workers who qualify for a work permit and have a justifiable need to be physically present in Canada for their work. Additionally, certain new permanent residents, who were likely already in Canada as temporary residents prior to receiving permanent resident status.

Our office crunched a few numbers from the IRCC and were interested to find that:

1. International Mobility Program work permits are down about 37% when compared with 2019;
2. NAFTA Professional WP’s are down 42% from 2019; and
3. IEC Work Permits are down 72%, which is expected because the programs have been suspended.

S02:02

GB: What about hiring technical employees in other countries without them immigrating?

I am aware that some clients are engaging prospective employees on a contract basis while those individuals remain outside Canada. Generally, this appears to be driven by COVID-related concerns and the increased travel and relocation difficulties for persons and their families from outside Canada. Individuals working in another country on contract with a Canadian business would not run afoul of Canadian immigration laws but also would not really provide much in the way of an immigration benefit outside of building a relationship with a potential Canadian employer.

S02:03

GB: How much effort are employers putting toward a person’s permanent work status or is this more incumbent on the individual?

An employer’s degree of involvement in an individual’s permanent work status generally depends on what stage the relationship between the prospective immigrant and the employer is at. At earlier stages of the employment relationship, my observation is that employers are less likely to be concerned with supporting an incoming person’s pursuit of permanent resident status. Prospective senior or highly specialized employees, who are expected to be significant contributors for the long term, may receive more support from their employer in their pursuit of immigration at an early stage in their relationship, but that is not always the case.

If a person is already working with a Canadian employer on an employer-specific work permit, then that person’s pursuit of permanent residence mostly requires the Canadian employer to:

confirm that the person is in receipt of an indeterminate offer of employment for their high-skilled position and outline the terms and conditions of that offer; and
where applicable, provide a reference letter outlining certain details required by IRCC to verify the person’s experience. Reference letters will also be needed from past employers.

In certain pathways to permanent residence, such as through the BC Provincial Nominee Program, employers must jump through more hoops by providing additional support including providing additional details about themselves and expressly explaining why the prospective immigrant is an asset to their business and to the region they will live and work in.

S02:04

GB: Some types of jobs are easier to hire from outside the country. What are typical ones and are there any shifts you’re picking up on starting this year and next?

Many work permit pathways exist, some of which are designed to assist certain groups of workers or specific occupations to enter Canada more easily.

As far as certain groups of workers are concerned, intra-company transferees are still able to transfer to Canada, provided the requirements for the pathway are met. As for specific occupations, a non-comprehensive list of preferential pathways for certain occupations will include:

1. NAFTA Professionals;
2. GATS Professionals; and
3. Global Talent Stream – Category B Labour Market Impact Assessments, etc.

Regardless of the pathway, the most significant barrier for most employers right now is whether the job requires the person to be in Canada. If work does not require a person to be in Canada, then that person may have a challenge seeking entry based on having a “non-optional and non-discretionary purpose” for seeking entry to Canada.

Where work is clearly required to be performed in Canada, then the above mentioned options for a work permit are still viable. The Global Talent Stream – Category B pathway is primarily geared towards IT professionals which do seem to be in greater demand, especially as industries move more significantly toward digitisation of work. The BC PNP also has a Tech pilot stream which can be beneficial to employers seeking to fill eligible occupations and is also attractive for prospective immigrants as the BC PNP provides a pathway for both a work permit and permanent residence.

S02:05

GB: What are some BC-specific immigration status updates – ‘state of the economy’ perspectives on volume, flow, new challenges, etc.?

Like the rest of Canada, the current trend in BC is significant reductions in permanent residents admitted to Canada who are bound for the province. Most likely, this is due to COVID-19 related travel restrictions, which are contributing to both longer processing times for applications and significant challenges for those who have been approved for permanent residence while outside Canada to come to Canada to receive permanent resident status. For example, in Quarter 3 of last year alone, nearly 16,000 new permanent residents bound for BC were admitted with a total of around 50,000 such admissions for the year. The total admissions for 2020 at the end of Quarter 3 was just over 20,000.

1. The data is similar for new work permit holders admitted to BC with a total of around 21,800 admissions by the end of Quarter 3 of 2020, whereas there were slightly over 16,000 admissions in Quarter 3 of 2019 alone. This is not unexpected as COVID’s impact on the economy and the travel restrictions have significantly restricted the scope of who is permitted to enter Canada.
2. The Temporary Foreign Worker Program is still active as LMIAs are still being processed. Overall there has been a decline of about 14% in the number of the LMIAs issued for positions in BC for 2020. The top occupations for LMIAs issued for positions in BC this year are:
3. General Farm Workers;
4. Transport Truck Drivers;
5. Cooks;
6. Food Service Supervisors;
7. Home Child Care Providers;
8. Nursery & Greenhouse Workers;
9. Harvesting Labourers;
10. Carpenters;
11. Software Engineers and Designers;
12. Agricultural Service Contractors, Farm Supervisors and Specialized Livestock Workers; and
13. Constructions Trades Helpers and Labourers.
14. The strong representation of positions in agriculture, transport and trades is not surprising given the types of industries that are considered essential right now. However, the overall total numbers are down from 2019 for most occupations. Tech workers also remain well represented, but there are more occupations so the numbers are spread out among various occupations.

S02:06

GB: In light of the NDP Majority, do you predict any shifts in provincial immigration policy? Is there anything else you and your colleagues are discussing now that Horgan holds the balance of power?

The province does not set immigration policy since immigration is within Federal jurisdiction. The Canadian and BC governments are party to the Canada-British Columbia Immigration Agreement which sets out certain shared goals as well as the parameters of the BC Provincial Nominee program. In keeping with that agreement, the province has introduced new measures to try and protect temporary foreign workers and is continually reviewing and updating its BC Provincial Nominee Program policies and guidelines. I am not currently aware of any other expected changes arising from the recent election that produced an NDP majority government.

S02:07

GB: What areas and industries are Business Immigrants investing in right now?

I honestly can’t tell you what Business Immigrants are generally investing in right now. For business immigrant specific programs like the Start-Up Visa program, the trend I have observed is that the 3rd party designated organizations tied to the program are generally more attuned to businesses tied to the IT industry. The Start-Up Visa program is still not a high volume immigration program, however. Many other prospective business immigrants may be investing in a wide variety of businesses to obtain a work permit which could allow them to immigrate as skilled workers. In those cases, they may not readily appear to be business immigrants from available immigration data.