Canadian HR Reporter

CANADIAN HR REPORTER October 3, 2016 8 NEWS HR Manager's Guide to Employment Files and Information Management: Legislation and Best Practices uniquely addresses the management of all types of employee information throughout the employment lifecycle, from recruitment to termination. Employment information and documentation management carries legal requirements that protect an organization from litigation, and are essential to the creation of sound policies for efficient, effective, and ethical business practices. Easy to read and understand, this new guide provides Human Resources professionals and others who deal with employee files, either electronically or in paper format, with: • Key legislation and emerging case law • Best practices in the areas of privacy, records retention, human resources information systems (HRIS), and information security • Practical guidance, tools and templates, such as sample policies • Information on all Canadian jurisdictions Available risk-free for 30 days Order online: www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order # 986618-65203 $70 Softcover approx. 100 pages April 2015 978-0-7798-6618-2 Shipping and handling are extra. Price(s) subject to change without notice and subject to applicable taxes. New Publication HR Manager's Guide to Employment Files and Information Howard A. Levitt, B.A., LL.B., and Tanya Neitzert, B.A., CHRP Brought to you by: © 2016 Thomson Reuters Canada Limited 00228VC-A49657-E98871 the people it has appointed itself or it doesn't trust the people that are in charge." The Ontario government changes also don't reveal the "mil- lions of dollars" paid to private contractors and lawyers "hidden in the shadows," according to Warren (Smokey) omas, presi- dent of the Ontario Public Service Employees Union (OPSEU) in To- ronto. "We'd like that disclosed." But it's a step in the right direc- tion since this involves taxpayers' money so they should be aware of what's being paid, in addition to the Sunshine List, he said. "It's high time that somebody had some oversight as to what people are making." Executive compensation is re- ally uneven, he said. "You'll have somebody in a small agency making $350,000 a year, and some make more than that, and we think it's just way too much money. You'll have a hospital CEO making three-quarters of a million (dollars) and somebody in a large corporation in another part of the province making $500,000 a year… so it's all over the map." Workers really resent it when their boss is making $500,000 a year and they're making $40,000 and the boss is saying, "Oh, you have to make do with less, we can't afford to give you a raise," he said. "You go, 'How does that work?' and it makes it tough on bargain- ing. So it's long overdue to have some guidelines." Details of framework The executive compensation framework came into force on Sept. 6 and applies to all employ- ers under the Broader Public Sec- tor Executive Compensation Act, 2014. e framework is guided by the principles of standardization (providing a consistent, evidence- based approach to setting com- pensation based on research and consultation), balance (managing compensation costs while allow- ing organizations to attract and retain talent) and transparency. It caps salary and performance- related payments for designated executives at no more than the 50th percentile of appropriate comparators. At least eight com- parator organizations must be used, including at least one Ca- nadian public sector or broader public sector organization. e framework also prohibits several elements of compensa- tion, including signing bonuses, retention bonuses, cash housing allowances, pay in lieu of per- quisites, insured benefits that are not generally provided to non- executive managers, and certain types of paid administrative leave. Termination payments, includ- ing payments in lieu of notice of termination, and severance pay- ments that equal more than 24 times the average monthly sal- ary of the designated executive re also not allowed. The same goes for termination or severance payments that are payable in the event of termination for cause. Employers will also be required to consult with the public when determining executive compensa- tion programs and post program details on their websites. They will also have to submit reports attesting that the compensation for their executives complies with the framework. Affecting about 340 employ- ers, the act covers "designated executives" who receive $100,000 or more per year, including CEOs, presidents, vice-presidents and directors and supervisory officers at school boards. e framework is a continua- tion of the compensation restraint philosophy the Ontario govern- ment has had in place since 2010, according to Paul Broad, a labour and employment lawyer at Hicks Morley in London, Ont. "It's consistent with how they addressed executive compensa- tion for a long time, consistent with the Sunshine List… their view is this is public funds and the public has a right to (see that)… and that creates accountability for the general public." When it comes to caps, em- ployers will have to both iden- tify the cap and explain how they got there, said Broad. Employ- ers will also have to develop a reasonable range of comparable organizations. "In some areas, that's going to be relatively straightforward, but you can imagine for certain key, very large organizations, there may be very few comparable or- ganizations within Ontario or Canada, for that matter," he said. So, employers will have to get the minister's approval before they can use other comparators, making for "a complex process," said Broad. e Ontario government also said the framework would mean employers "are able to attract the necessary talent to deliver high- quality public services while man- aging public dollars responsibly." But some employers might say this will hamper their ability to at- tract people, said Broad. "at's going to vary signifi- cantly by organization. Large organizations that have interna- tional competitors or a lot of com- parable organizations who may be at an international level in the U.S. or Europe may find this is more limiting than they'd like." e framework is not going to help the broader public sector find people, said Malsch. "It's going to make the task more complex for board mem- bers, for institutions, for organi- zations who recruit talented peo- ple… e market is mobile and you can't have a local way of think- ing when you want to regulate top executive compensation in public institutions," said Malsch. "is regulation will hurt, es- pecially in the context of a weak- ening dollar and high tax rate in Ontario… even when we offer lots, we are still far below what they can make in the U.S." Setting executive compensa- tion is quite a complex process so, at a certain level, it has to be pushed back into the organiza- tion, said Broad. "Just like any sector in Ontar- io, you've got organizations that range from mammoth organiza- tions with international stature to very small ones, so how do you develop a single standard for all of that?" ere's no need for a one-size- fits-all regulation, said Malsch. "Board members know that the labour market for a hospital is not the same for a university and is not the same for school board so that's why we have those people who supposedly have the knowledge and the expertise and the thinking to make the right decision." With new complexities and risks, employers often bring in an external person to help, he said. "I won't be surprised that the money that the government hopes to save with respect to the caps put, for instance, on ex- ecutive salaries will be lost on the cost that all those consultants will present for these organizations," said Malsch. "ey will have to recruit con- sultants or professionals to help them frame the rationale behind just the choice of the comparable." As for consulting with "the pub- lic," it's not quite clear what that means, he said. For a hospital, for example, does it mean patients, the community or the province at large? The regulation simply says "consult with the public" and doesn't really say much beyond that, said Broad. "ere doesn't appear to be an obligation to change it in response to the feedback." But public consultation is still a good idea, said omas. "If (employers) put it out there and don't do nothing with the feedback, then there's one more way to hold government account- able, so guys like me can chase af- ter them and say, 'Hang on a sec- ond, here's what the public said, here's what you did, and they're not even close.'" For now, the framework is here to stay as it's unlikely any politi- cian will risk the headline: "Gov- ernment decides to remove cap on executive compensation," said Malsch. "Maybe in the coming years, they will find ways to relax the standards, to relax the constraints, and I also suspect directors and boards and institutions will find a way also to not bypass — this is a strong word — but to adapt and be creative and remain competitive, so it's not all black and white." Employers now required to consult with public ONTARIO < pg. 1 "Large organizations with a lot of comparable organizations on an international level may find this is more limiting than they'd like." Credit: Rob Schumacher (USA TODAY Sports) Saad Rafi, former CEO of TO2015, walked away with severance equal to his annual salary of $428,794, according to the Toronto Star.

• Cover