Canadian Employment Law Today

with Colin G. M. Gibson Ask an Expert HARRIS AND COMPANY VANCOUVER Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com Canadian HR Reporter, a Thomson Reuters business 2019 2 | February 6, 2019 Discipline for misconduct while socializing with clients Question: Can an employer discipline an employee for off-duty behaviour that occurred while socializing with a client after their business was completed? Canadian HR Reporter, a Thomson Reuters business 2019 Answer: Across Canada, provincial employ- ment standards legislation sets out the mini- mum vacation employees are entitled to, and how vacation is earned. For employees in federally-regulated industries, these en- titlements are set out in the Canada Labour Code. While vacation entitlements are simi- lar across Canadian jurisdictions, employers should check the applicable legislation be- fore making a decision about vacation. Employment standards statutes draw a distinction between vacation time and vaca- tion pay. Vacation time is earned based on the employee's length of continuous service with the employer. In most Canadian juris- dictions, employees are entitled to a mini- mum of two weeks' vacation per annum af- ter completing the first year of employment, and then three weeks' vacation per annum after five years of employment. Statutory vacation pay is calculated as a percentage of annual wages. Most Canadian jurisdictions set minimum vacation pay at four percent of total annual wages during the first five years of employment, and then six percent of total annual wages after five years of employment. Because the minimum statutory vacation time and vacation pay entitlements are cal- culated differently, they are impacted by a leave of absence in different ways. In British Columbia, employees continue to earn vacation time during a statutorily protected leave, such as a parental, compas- sionate care, or bereavement leave. Similar provisions exist in New Brunswick, Ontario, Saskatchewan, Quebec, and the Yukon. In other jurisdictions, however, such as Al- berta, Manitoba, Newfoundland and Lab- rador, Nova Scotia, Prince Edward Island, the Northwest Territories, and Nunavut, employees do not earn vacation time during a statutory leave. For non-statutory leaves, the terms in the employment contract or collective agree- ment will determine whether vacation time is earned. It is common for such an agree- ment to provide that the amount of vacation time or pay is calculated based on the time that an employee has been "continuously employed" or "in service." Absent language to the contrary, such a provision will gen- erally mean that a leave of absence will be counted toward service for the purpose of entitlement to vacation. For workplaces in which vacation pay is calculated as a percentage of wages, an un- paid leave of absence will have the effect of Answer: e employment and arbitral case law establishes a separation between an employee's working and personal lives. An employer can only discipline an employee for off-duty behaviour that affects the em- ployer's legitimate business interests. De- pending on the circumstances, conduct that occurs while socializing with a client could fall within that category. e law on off-duty misconduct devel- oped in the unionized context, and has been adopted by the courts in dealing with non- unionized employees. e general rule is that an employer must establish a connection be- tween the employee's off-duty conduct and his employment in order to justify discipline. According to a leading case, Re Millhaven Fibres Ltd. & Oil, Chemical and Atomic Workers I.U. Loc. 9-670, the conduct must either damage the employer's reputation, af- fect the employee's ability to perform her du- ties, cause other employees to refuse to work with her, or inhibit the employer's ability to manage and direct its business. An employ- er may discipline an employee if any one of these factors is satisfied. In the context of the question, the most relevant Millhaven factor is damage to the employer's reputation. Even if business with the client has been completed, an employee's behaviour may harm the employer's reputa- tion, expose it to potential liability, and/or influence the client's choice to do business with the employer or recommend the em- ployer to friends or colleagues. In a legal proceeding, an employer bears the onus of proving that the employee's con- duct was sufficiently injurious to its busi- ness or reputation to justify dismissal or disciplinary action. However, the employer does not need to prove that actual damage to reputation occurred. Instead, the ques- tion is whether a "fair-minded and well- informed" person would think the conduct would damage the employer's reputation. Further, in Langley, the arbitrator ruled that a degree of deference should be given to the employer's assessment of the risk to its own reputation. To warrant discipline or discharge, however, a clear causal connec- tion between the off-duty behaviour and the employer's reputation or business interests must be proven. e employee's behaviour must also be assessed in relation to her specific position and the nature of the employer's business as a whole. Senior employees, or those who oc- cupy a position of trust, may have a greater duty to uphold the reputation of the employ- er. For example, in Northwest Territories, a "higher standard of off-duty conduct" was applied to a Juridical Officer in light of the employer's "legitimate interest in protect- ing the reputation of the court system." e nature of business carried out by a public sector employer may also attract a higher standard of conduct. is was the case in the Langley decision noted above, where the ar- bitrator considered the municipal employ- er's interest in "the protection, promotion and advancement of the interests and public welfare of its citizenry" as justification for discipline. Off-duty misconduct while socializing with a client could take a number of forms. e behaviour may have been witnessed by the client, directed at the client, or the cli- ent may have participated in that behaviour themselves. e behaviour itself could vary, ranging from such things as excessive drink- ing, harassment, or a verbal or even physical altercation with a person in attendance. All the circumstances would need to be consid- ered in determining whether discipline is warranted. For more information see: • Re Millhaven Fibres Ltd. & Oil, Chemi- cal and Atomic Workers I.U. Loc. 9-670, [1967] O.L.A.A. No 4 (Ont. Arb.). • Langley, (1995) 46 L.A.C. (4th) 30 (Greyell). • Northwest Territories, (1999) 83 L.A.C. (4th) 43 (Chertkow). Earning vacation during paid or unpaid leaves Question: Does the time an employee spends on paid or unpaid leave count as time served for the purpose of earning vacation? Can an employer have a policy specifying that it doesn't? TIME on page 7 »

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