This presentation gives an in-depth look at several current HR issues. Discussing such topics as overtime, compressed work schedules, reference letters, employment contracts, and terminations if you are an employer or an HR Manager you will want to review this presentation.

1. Current HR Issues
1

2. Got Overtime? How Overtime
Obligations Arise and How to Deal with
Them
Presenter: Joe Hunder
Partner
Employment & Labour
2

3. Who is Entitled to Overtime?
• Employment Standards Legislation – Employment Standards
Code
• When employer agrees to provide it/contractual overtime
3

4. Code Obligations
• Basic Obligations
4

5. When do overtime obligations arise
under the Code?
1. After an employee works 8 hours in
a day
2. After an employee works 40 hours in
a week
3. After an employee works 44 hours in
a week
4. When an employee works more than
8 hours a day or 44 hours per week
5. Obligations are different depending
on the industry a person works in
6. Quiet! I’m making my grocery list!
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5

6. Basic Obligation
• Except for certain positions, professions and industries ‐ basic
overtime obligation after 8 hours per day or 44 hours per week
• Overtime obligation – 1.5 times employee regular wage rate
6

7. Exemptions and Exceptions
7

8. People who are salaried employees are
not entitled to overtime under
the Code
1. True
2. False
3. It depends, which is always
the answer I get from my
lawyer
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9. Managerial Exemption
• A person falls within the managerial exemption if the person is
employee in a supervisory capacity, a managerial capacity or in
a capacity concerning matters of a confidential nature
• Contingent on what a person does
• Salary alone not the determining factor
9

10. Other Employees to Which Overtime
Hours and Pay do not Apply
• Managers, supervisors and those employed in a confidential capacity
• Farm workers
• Professionals
• Salespersons of automobiles, heavy machinery, homes
• Salespersons who solicit orders
• Licensed salespersons of real estate and securities
• Licensed insurance salespersons who are paid entirely on commission
• Salespersons who are at least 16 and engaged in direct selling
• Licensed land agents
• Extras in a film or video production
• Counselors or instructions at an educational or recreational camp
• Domestic employees
10

11. Industries and Employees with Different
Overtime Rules
11

12. Contractual Overtime
• Through either express agreement or conduct an employer can
agree to pay overtime, even though there is no labour
standards obligation
12

13. Managing Overtime Obligations
• Know your obligations and manage your business accordingly
• Compressed Work Schedules
• Time off in Lieu/Overtime Agreements
13

14. Know your Obligations and Manage Your
Business Accordingly
• The most straightforward solution
14

15. Compressed Work Schedules
• What are they?
• How do they work?
• Elements to be valid
• Can be used in combination with overtime agreements
15

16. Examples of Compressed Work Schedules
• Single Week Example
– Non‐CWW Schedule:
• 5 days of 8 hours, plus 4 hours on day 6 = 44 hrs/wk
– CWW Schedule:
• 4 days of 11 hours = 44 hrs/wk
• Daily hours are increased from 8 to 11 and days worked reduced from 6 to 4
• Multi‐week Example
– Non‐CWW Schedule:
• 6 days or 7 hours = 42 hrs/wk
– CWW Schedule:
• Week 1 – 3 days or 12 hours, then 4 days off = 36 hrs/wk
• Week 2 – 4 days of 12 hours, then 3 days off = 38 hrs/wk
• Daily hours are increased from 7 to 12 and days working reduced from 6 to 3 in the
first week and 4 in the second
• Average total weekly hours are 42
16

17. Time Off in Lieu ‐ Overtime Agreements
• A common practice to “bank time”
• Banking time or pay is lieu of overtime requires an overtime
agreement
• Elements of a valid overtime agreement
17

18. Write and Wrong: How to deal with
reference letters for departing
employees
Presenter: Adrian Elmslie
Partner
Employment & Labour
18

19. Why Provide a Reference Letter?
19

20. Obligations
• No specific, independent contractual duty to provide a letter of
reference to a departing employee.
• Think carefully before refusing to provide a letter of reference to a
departing employee
20

21. Purpose of a Reference Letter
• A reference letter generally assists a departing employee in
finding new employment
• Generally in the best interest of everyone for the employer to
provide a reference letter
21

22. Duty of Good Faith
• Duty of good faith ‐ requires employers to be candid, reasonable and
honest in dealing with departing employees
• Duty includes a duty not to refuse to provide a letter of reference to
a departing employee where there is no legitimate reason for
refusing the request
• Breach of this duty can result in liability
22

23. Duty of Good Faith
• Examples of bad faith refusal:
– Refusal in order to purposefully make it harder for an employee
to find new employment;
– Refusal in order to pressure the employee into settling a
wrongful dismissal claim; or
– Refusal in order to punish the employee
23

24. When Should a Reference Letter be
Provided?
24

25. When should a reference letter be
provided ?
• With no specific performance issues or termination for cause, the
safest course is to provide a letter of reference
• Sound practice is to refuse to provide a letter of reference only in
cases where the employee has been discharged for serious
misconduct that the employer is confident it can demonstrate this
on an objective basis to a third party
25

26. What Should the Reference Letter say?
26

27. What should the reference letter say?
Potential Liabilities
• Two primary groups of potential claimants:
– the former employee; and
– the new employer
27

28. What should the reference letter say?
Liability ‐ Departing Employees
• Can arise as a result of a negative reference letter that interferes
with the former employee’s ability to find work or maintain
employment
• Has to be misleading or untruthful for liability to arise
28

29. What should the reference letter say?
Liability: Prospective Employers
• Arises out of the principles of negligent misrepresentation
• Avoid letters that are misleading or unnecessarily positive (e.g.
recommending an employee for a position handling large sums of
cash after he or she has been terminated for theft)
29

30. Avoiding Problems
1) Make sure the information in your reference letters is accurate
2) Avoid subjective opinions and stick to objective facts
3) Do not use reference letters to “punish” a former employee or
make it more difficult for the former employee to find alternate
employment
4) Use caution in drafting negative reference letters
5) Control who responds to reference letter requests
30

31. Employment Contracts: Worth the
Paper They are Written on?
Presenter: Colleen Verville
Partner
Employment & Labour
31

32. Employment Contracts
• Employment contract can be oral or written or a combination
of both oral and written
• Why get it in writing?
– Certainty
– Clarity
– Proof
32

33. Employment Contracts
• To include specific terms such as:
– Probationary term
– Position and Duties & Responsibilities clause
– Reporting clause
– Hours of Work and Overtime clause
– Employer Policies and Procedures
– Remuneration (includes annual salary, benefits plan and expense, etc.)
clauses
33

34. Employment Contracts
• Termination clause (without cause)
• Reasonable notice (working notice) or pay in lieu of notice
• Fixed term contracts (early termination clause) or Indefinite
term contracts (termination provision)
• Employment Standards Code (Alberta) – statutory obligations
– Minimum Standards
34

35. Employment Contracts
• Common law obligations
– Reasonable notice
– Key factors
• Age
• Length of service
• Remuneration
• Position
• Duties and responsibilities
• Can be significant
• Contract must meet or exceed minimum statutory
requirement but can limit common law obligations
35

36. Employment Contracts
• Confidentiality clauses
– Clarify what is covered
– Clarify expectations and obligations
• Restrictive Covenants
– Non‐solicitation
– Non‐competition
36

37. Employment Contracts
• Key is whether the restrictions are reasonable in the
circumstances
– Depends on:
• Certainty
• Geographic scope
• Temporal scope
• Scope of business
37

38. Employment Contracts
• Key things to remember for employment contracts to be
enforceable:
• Termination clause must be clearly and concisely worded and
must meet or exceed the Alberta Employment Standards Code
• Independent legal advice clause:
• Employee must sign contract before starts
38

39. The Globex Decision
Presenter: Alison Walsh
Associate
Employment & Labour
39

40. The Globex Decision
• Globex Foreign Exchange Corporation v. Kelcher et al., 2011
ABCA 240
40

41. The Globex Decision
• That for a period of twelve (12) months from the date of termination of the
Employee’s employment with Globex, for whatever reason, he/she will
not, for any reason directly or indirectly as principal, agent, owner, partner,
employee, consultant, advisor, shareholder, director or officer or otherwise
howsoever, own, operate, be engaged in or connected with or interested
in, the operation of or in any way guarantee the debts or obligations of, or
have any financial interest in or advance, lend money to, or permit his/her
name or any part thereof to be used, or employed in any operation
whether a proprietorship, partnership, joint venture, corporation, or other
entity, or otherwise carry on, engage in, solicit customers in any manner
whosoever, in any business or activity for any client of Globex with which
he/she had dealings on behalf of Globex at any time within the twelve (12)
months preceding the date upon which the Employee left the employment
of Globex.
41

42. Stress‐Free Terminations: reducing your
risk when terminating employees
Presenter: Fausto Franceschi
Partner
Employment & Labour
42

43. 43

44. 44

45. Reasons For Terminating the Employee
• Without cause v. just cause
• Just cause obviates the need for notice or pay and benefits in
lieu of notice
• Just cause is serious misconduct that irreparably damages the
employment relationship
• Few cases where an employer has ironclad grounds for
terminating an employer for just cause
45

46. Common “Problems” In Establishing
Just Cause
– Misconduct or poor performance not quite bad enough for a just cause
dismissal
– More warnings or constructive suggestions should have been given
– There was some sort of apparent condonation of the employee’s
misconduct on the part of the employer
• In absence of just cause the employer must provide terminated employee
with notice of termination
• Vast majority of terminations are without cause terminations
46

47. Three Sources Used to Determine
Length of Notice
1. Employment Standards Code (Alberta)
• Provides for the employer’s minimum obligations (maximum
entitlement under the Code is 8 weeks for 10 years of
employment or more)
• Preserves any greater rights the employee has at common
law or by way of contract
47

48. 2. Employment Agreement
• Do you have a valid employment agreement?
• Does the employment agreement contain a termination provision?
• Termination provision void if it does not provide for at least the statutory
(Employment Standards Code) minimum
• Valid contractual termination provision will trump the common law
48

49. 3. Common Law
• Our experience is that most employers do not have employment
agreements in place despite the obvious benefits
• So the common law will govern the termination of the employment
relationship
• Common law contract of employment
(i) indefinite term
(ii) either party may validly end the contract at any time
(iii) ending the contract is not a breach of contract, nor is it a tort
(iv) reasonable notice of termination must be given
(v) can provide pay and benefits (severance) in lieu of reasonable notice
49

50. Wrongful Dismissal
• Misnomer
• “Wrongful” does not refer to the fact of dismissal – it refers to
the failure to provide reasonable notice or pay and benefits in
lieu of notice
50

51. Reasonable Notice
• Assessing notice is an art, not a science
• Main factors in assessing notice:
(i) position and character of employment
(ii) length of service
(iii) age of employee
(iv) employee’s compensation
(v) availability of similar employment
51

52. Reasonable Notice
• There are other factors (eg. enticement, relocation to accept
position, promise of security, etc.)
• Key question: How long will it take the employee to find
comparable alternative employment?
• Top end awards generally 24 months although some cases
have awarded more
52

53. Other Considerations
• Key concept: put the employee in the same position the
terminated employee would have been in had he or she
worked through the notice period
• Damages will also include amounts to compensate for the loss
of benefits during the notice period
– Share options/profit sharing/bonus plans
– Group benefits/pension/insurance plans
• Mitigation
53

54. Implementing the Termination
• In a downsizing of operations do not ask for volunteers to
leave your organization
• Determine common law exposure
• Corporate philosophy determines generosity of the offer
54

55. Implementing the Termination
OPTIONS
• Working notice
• Lump sum severance payment
• Combination of working notice and severance
• Salary continuance (various options if employee finds work during salary
continuance period)
• Provide employee with a choice (eg. lower lump sum payment v. higher
salary continuance)
55

56. Termination Meeting
• Persons performing the termination should generally be the employee’s
supervisor together with someone from HR or another person in
attendance as a witness
• Callousness and clumsiness in the termination interview creates animosity
and could foster litigation
• Persons conducting the termination may subsequently be witnesses at trial
so should be comfortable conducting the termination
• Prepare agenda
56

57. Termination Meeting
• Terminate privately in office of the terminated employee or
office of the person doing the terminating (depending on the
situation, could have an offsite termination meeting)
• Terminate at the end of the day so can leave the premises
without encountering co‐workers
• Any day but Friday as the weekend may impede the
terminated employee from contacting members of his or her
personal support network and can therefore increase the
shock, worry and tension
57

58. Termination Meeting
• Get to the point quickly without a lengthy preface
• Tell the terminated employee in a general way the reasons (be honest!) for
the decision but avoid debate (“I am sorry but the decision is final”)
• Arrange for return of company property (documents, customer lists, keys,
credit cards, etc.) and supervised removal of personal effects from the
employee’s office
• Arrange with IT to cut off access to computer and building access while
termination meeting is taking place
• Should not be longer than 20 to 30 minutes (preferably shorter)
58

59. Termination Meeting
• If anticipate a “bad scene” have security available
• Do not threaten a bad reference if terminated employee refuses to sign a
release
• Conclude the meeting with an explanation of the major severance terms
• Provide letter to employee confirming termination
• If providing severance which is greater than the minimum statutory
requirements, the offer should be subject to a release
• Provide a deadline for consideration of the offer
59

60. Termination Meeting
• Termination letter should remind employee of any post employment
obligations (confidentiality, non‐solicitation, non‐competition)
• Termination letter should also confirm which benefits continue and which
benefits cease and of benefit conversion options, if any
• Record of Employment should be consistent with what would be argued at
trial (if you allege cause don’t say termination is due to “lack of work”)
• If outplacement assistance will be provided have the outplacement
provider present so the terminated employee can be handed off to the
outplacement provider following the termination meeting
60

61. Termination Meeting
• Make notes of meeting immediately thereafter
• Announcement to other staff should not get into reasons or details of
termination
• Put a protocol in place to respond to reference checks
• Poorly handled terminations lead to:
(i) wrongful dismissal litigation or human rights claims
(ii) morale problems
(iii) potential difficulties in future hiring
(iv) potential union organizing drives
61

62. Termination Meeting
• Honda v. Keays (SCC): when dismissing an employee, an
employer has a duty NOT to use methods which are unduly
unfair, insensitive, untruthful or misleading in the methods
used to terminate the employee (examples used by the court
to describe unfair or insensitive terminations includes telling
co‐workers that the terminated employee is stupid or
incompetent; dismissing an employee within a day or two of a
daughter’s wedding or the death of a parent; insincerely
alleging embarrassing or demeaning (but unfounded) reasons
for dismissal and dismissals meant to deprive the employee of
a pension benefit or other right)
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63. Termination Meeting
• You must be candid, reasonable, honest and forthright with
your employees
• Engaging in unfair, insensitive, untruthful or misleading
behaviour leads to damages for the manner of dismissal
63

64. Tax and EI Issues
• A severance payment is taxable as a “retiring allowance” under
the Income Tax Act
– 10% for payments up to $5,000
– 20% for payments over $5,000 but not over $15,000
– 30% for payments over $15,000
• Since January 2011 retiring allowance payments should be
reported on a T4 slip, like other employment income, rather
than on a T4A
64

65. Tax and EI Issues
• A retiring allowance can be rolled tax free into a RRSP
• The eligible RRSP rollover is:
– $2,000 per pre‐1996 calendar year of employment; and
– An additional $1,500 per pre‐1989 year for which no
employer pension contributions have been made
65

66. Tax & EI Issues
• Non‐eligible RRSP Rollover ‐ If the employee has room in his
or her RRSP, an amount up to that threshold can also be rolled
over without withholding tax provided the employee provides
adequate evidence of entitlement to the deduction
• If a terminated employee has received EI benefits prior to a
settlement being achieved, the settlement may trigger an EI
overpayment issue
66

67. Conclusion
• Proper planning and thought will reduce your risk of exposure
and will allow you to navigate the unpleasant task of a
termination relatively “stress free”
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69. 69

70. Thank you for Joining Us
Joe Hunder 780.423.7354 e: joe.hunder@fmc‐law.com
Adrian Elmslie 780.423.7364 e: adrian.elmslie@fmc‐law.com
Cristina Wendel 780.423.7353 e: cristina.wendel@fmc‐law.com
Fausto Franceschi 780.423.7348 e: fausto.franceschi@fmc‐law.com
Colleen Verville 780.423.7103 e: colleen.verville@fmc‐law.com
Alison Walsh 780.423.7147 e: alison.walsh@fmc‐law.com
70

71. The preceding presentation contains examples of the kinds of
issues companies dealing with HR issues could face.
If you are faced with one of these issues, please retain
professional assistance as each situation is unique.