Canadian HR Reporter

CANADIAN HR REPORTER October 19, 2015 INSIGHT 23 Brian Kreissl Guest Commentary Is salary, bonus information confidential? It depends on the employer's operation, terms of employment agreement Question: Can an employee's compensa- tion information (salary and bonuses) be considered confidential company infor- mation that employees can be prohibited from disclosing? Answer: At common law, an employee has an implied duty of good faith, which prevents the employee from disclosing or mis- using the employer's confidential information. Also, employment contracts often contain express provisions that are designed to protect the confidentiality of the employer's trade secrets and other types of confidential information to which the employee could be exposed. But what information is con- fidential? Do an employee's con- fidentiality obligations extend to information about salaries or bonuses? What about other types of remuneration, such as an em- ployee's benefits, car allowances, commission plans and retirement arrangements? e answer to these questions will depend on the nature of the employer's operation, and the ex- press or implied terms of the ap- plicable employment agreement. In unionized workplaces, the terms and conditions of employ- ment covering the bargaining unit employees will be set out in the collective agreement, which in most jurisdictions is a public document. Similarly, the remuneration that is provided to managerial and other employees who work for the government or for public sector employers, will usually be publicly available and/or acces- sible under freedom of informa- tion legislation. In some industries, however, in- formation about salaries, bonuses and other aspects of compensa- tion may be highly confidential. It may be very important for the maintenance of an employer's competitive position, for example, to ensure wage and remuneration information does not fall into the hands of its competitors. Also, an employer may not want its employees discussing their salaries and bonuses with co-workers. If an employer wants to protect the confidentiality of its compen- sation information, it should not rely on its employees' implied common law duties, as those ob- ligations may fall short of grant- ing the protection the employer requires. In Fanucchi v. Price's Alarm Systems Ltd., for example, the employee was dismissed less than a week after commencing employment after divulging her salary to another employee. At trial, the employer argued the employee had breached her duty of confidentiality. e trial judge found the em- ployee had not understood she was required to treat her salary as confidential, and ruled the em- ployer had not established cause for dismissal. Employment agreement The best way to ensure confi- dential information is properly protected is through a carefully drafted employment agreement. e agreement should: •contain a clear and comprehen- sive definition of confidential information •set out the covenants the em- ployee is required to comply with to preserve the confidentiality of that information •describe the consequences of non-compliance. If the penalty for disclosing con- fidential information is dismissal, that should be clearly spelled out. It may also be advisable to supple- ment the employment agreement with policies, communications and other notifications to empha- size the importance of maintain- ing the confidentiality of specific types of information. Colin G.M. Gibson is a partner with Harris and Company in Vancouver. He can be reached at (604) 891-2212 or cgibson@harrisco.com. If an employer wants to protect the confidentiality of compensation information, it should not rely on implied common law duties. Colin Gibson Toughest HR Question Why don't people 'get' human resources? Bone-headed comments on online forums show ignorance of general public Awhile back, I wrote a blog post that talked about some of the misconceptions CEOs and business leaders in other functions have about HR. While there is defi- nitely quite a bit of ignorance within the business community with re- spect to what HR actually does, I find the general public has even less of an understanding of what HR is all about. Lately, I've come across some re- ally bone-headed comments on online forums relating to human resources — particularly from jobseekers who just don't under- stand the nature and purpose of the HR function. It is clear HR is a popular tar- get these days — particularly when it comes to the poor job market and employers being far too picky and highly bureaucratic in their recruitment policies and practices. While I don't feel the need to act as a "cheerleader" for HR at all times — and I do think we should share at least some of the blame for dysfunctional recruitment processes in organizations — people need to be informed about just what HR does and doesn't do and to whom we're ultimately accountable. e following are five miscon- ceptions relating to human re- sources that I've come across over the last few months — particularly with respect to recruitment. HR often isn't responsible for inflated job requirements I've certainly mentioned this be- fore, but there's no question many job postings these days are simply asking for too much from poten- tial applicants. Rampant credentialism, a long laundry lists of skills and the insis- tence on candidates having held the exact same job in the exact same industry mean almost no one is good enough for many job vacancies. While human resources must share part of the blame, the idea of some overzealous HR recruiter unilaterally changing a job de- scription to ask for five years' experience in a technology that's only existed for three is generally just an urban legend. Believe it or not, in my expe- rience, those types of "require- ments" generally come from hir- ing managers who aren't that close to the technologies or the people they're managing. ere is much more to HR than recruitment To me, this is the number one misconception in the minds of the general public about the HR profession. Because of it, many people's criticism of "HR" wouldn't apply to a large number of HR professionals — and many recruiters don't even consider themselves to be HR. Many people just don't realize that probably the majority of hu- man resources practitioners don't even handle recruitment as part of their jobs. at's why we need to educate people about the broad spectrum of HR activities. If 500 people apply for a single vacancy, 499 of them are going to be rejected Many people fail to realize that large well-known organizations routinely receive hundreds of ap- plicants for many of their postings. While people can easily ap- ply online from anywhere — and many applicants these days aren't even remotely qualified for the jobs they apply for — the job mar- ket still isn't great and, as a result, there are often many viable candi- dates to choose from. Organizations simply cannot hire everyone who applies for a job, nor can they interview ev- ery candidate — especially when there's only one vacancy. Most of us have probably experienced frustration when we didn't get called after applying for a job we thought we were a perfect fit for, but every organization has differ- ent criteria and it's incredibly chal- lenging sometimes to determine who to bring in for an interview. HR doesn't make selection decisions While HR usually prescreens can- didates, conducts first interviews and prepares shortlists of candi- dates, human resources almost never makes the actual hiring decision. at would be the responsibil- ity of the hiring manager. ere- fore, it's usually not HR's "fault" if a candidate doesn't get hired in the end. Just because a recruiter asks you to tell her about your work history doesn't mean she hasn't read you resumé When I was a recruiter, it often used to frustrate me when I asked people who came in for inter- views to walk me through their career history, and they would say something like "It's all there in the resumé." I've also seen people complaining about how "rude" this is on online forums. People have to realize this is a conversation starter during the interview process and it's also a way to obtain additional infor- mation about a job candidate, beyond what's included in the re- sumé; it doesn't mean the recruit- er hasn't reviewed their resumé beforehand. Brian Kreissl is the Toronto-based product development manager for Carswell's human resources, OH&S, payroll and records retention products and solutions. "I am always skeptical when a business offers an altruistic rationale for a self-serving decision — 'If we raise the minimum wage, we won't be able to have as many employees.' The reality is salary negotiations cost employers more money if they have fallen behind in competitive pay — but the negotiations also serve the company in helping keep good workers who might leave if their pay wasn't recalibrated. What is wrong in this story is employers too often consider a salary negotiation as a one-off event rather than an indication the pay scale is off. That means those who don't complain risk being underpaid by these employers. The answer isn't to ban negotiations but rather to have all employees, male and female, speak up if they feel undervalued. "But there is another side too — sometimes the employer has done the homework and set pay competitively, and an employee complaining just proves she isn't realistic about her skills and value which, in itself, devalues the employee further — the end of those discussions often means an irrevocable path to an employee exit. Before negotiating, employees should do their homework, make sure they are comparing apples to apples and be ready to leave an organi - zation if not paid fairly — then they are ready to demand fair pay." Joe Nunes, commenting on Claudine Kapel's blog "Do salary negotiations fuel pay inequities?" Join the conversation. Comment on any blog on www.hrreporter.com. READER COMMENTS It's not usually HR's "fault" if a candidate doesn't get hired in the end.

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