Canadian Employment Law Today

May 15, 2019

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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2 | May 15, 2019 with Leah Schatz Ask an Expert MLT AIKINS LLP, SASKATOON Have a question for our experts? Email Canadian HR Reporter, 2019 Ask an Expert Parental leave for employee who may not be involved with child Question: Does an employer have to provide parental leave to an employee who is the biological father of a baby but it knows the employee isn't really involved with the care of the child (the mother has a new partner and is estranged from the employee)? Liability for employees carrying on after sale of business Question: If a company sells a part of its business to another company (employees and all), does the new company have to provide the same compensation, benefits and pensions, or can it change any of these without risking liability? Answer: is is something that the par- ties should consider at the front end of a transaction. Purchasers and vendors alike must turn their minds to labour and em- ployment law issues when conducting the purchase and sale of a business. One cen- tral consideration is whether the transac- tion takes the form of an asset purchase or a share transfer. Where the transaction is a transfer of shares, the corporation and employer remains the same, even if the corporation has new owners. In the case of the sale of a business as a going concern, the employment with the former employ- er ends but is usually continued with the new employer. Each transaction brings about different consequences that each party will want to turn its mind to. Another critical question is whether the vendor's business has been certified by a trade union and whether the purchaser will be a "successor" under labour legisla- tion. Where a vendor's business is union- ized, the purchaser of that business may well inherit the certification order, any col- lective bargaining agreements, labour re- lations board orders and proceedings, and any other obligations that the vendor had under the applicable labour legislation. In the context of a share transfer, any unilateral changes to the level of compen- sation, benefits or pension entitlement can open the employer up to potential liability in constructive dismissal. Constructive dismissal arises when an employer uni- laterally makes a change to a fundamental term of employment without obtaining consent from the employee. e same risk can arise if the employer wants to unilat- erally and fundamentally change the na- ture of an employee's duties. Imposing a different set of duties than those set out in a contract can constitute constructive dismissal. It is also critical to bear in mind that most jurisdictions provide protection for employees in the context of a sale of a business. Employment standards legis- lation in most jurisdictions provides for continuity of employment, for the pur- poses of minimum statutory benefits and entitlements under the legislation, where an employer sells all or part of a business and the purchaser employs the employees of the seller-employer. ese provisions aim to ensure that all of the benefits con- tingent on an employee's length of service (such as vacation and parental leave enti- tlements as well as entitlements to notice of termination or pay in lieu of notice and severance pay) are carried over to the em- ployee's new employment with the pur- chaser of the business. However, it is possible to mitigate any unintended consequences flowing from the purchase of a business by clearly set- ting out the seller and purchaser obliga- tions in the contract. Obtaining legal advice at the front end of a transaction is critical. Some questions that a purchaser will want to consider include: Answer: Human rights legislation gener- ally prohibits employers from discriminat- ing against employees on the basis of pro- tected grounds with respect to the terms and conditions of employment. Depending on the applicable human rights legislation, the protected grounds of family status and gender would likely be engaged. As such, an employer who refuses an employee's request for leave on the basis of these pro- tected grounds will likely find itself on the receiving end of a human rights complaint. Whether or not the employee is successful is another question and will depend on the unique circumstances of the case. First, it is reasonable for an employer to expect that this employee is taking the leave for purposes related to parenting the newborn child. Certainly, an employee who is taking his statutory parental leave should not be using that time to go back- packing across Europe. However, an em- ployer should avoid making any assump- tions about the employee's circumstances based on that employee's gender and family status. Just because the employee is not the primary caregiver does not mean that he is not entitled to take parental leave. Employers will want to reference the ap- plicable employment standards legislation. Most jurisdictions do not impose the con- dition that the employee be the "primary caregiver." In Manitoba, an employee must have simply become "a" parent of a new- born child. e entitlement to leave begins once the child is born, adopted, or comes into the care and custody of the employee. Federally regulated employees are sub- ject to more specific requirements. Section 206.1 of the Canada Labour Code states that employees are entitled to parental leave "to care for a new-born child of the employee" or "a child who is in the care of the employee for the purpose of adoption." us, if the employee in this scenario is a federally regulated employee, he will need to be involved with the care of the child. Based on the law in each respective juris- diction, as long as the employee works the required length of time (if any), the employ- ee is generally entitled to the statutorily prescribed parental leave. e qualification period between the provinces varies. For example, in Saskatchewan and Ontario the qualification period is 13 weeks' service. In Manitoba, the employee must have worked at least seven consecutive months with the employer. Federally regulated employees must have six consecutive months' em- ployment with the employer. Although this employee's parental leave needs to be legitimately connected to par- enting, the employer will want to avoid making any assumptions on the basis of this employee's perceived family status. Parenting arrangements between es- tranged spouses can take many forms and human rights legislation recognizes this. Parenting arrangements between estranged spouses can take many forms Employment standards legislation provides for continuity of employment for the purposes of minimum statutory benefits CLEARLY on page 7 ยป

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