Canadian Employment Law Today

with Meghan McCreary Ask an Expert MACPHERSON LESLIE & TYERMAN REGINA Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com Canadian HR Reporter, a Thomson Reuters business 2017 2 | February 1, 2017 Canadian HR Reporter, a Thomson Reuters business 2017 WEBINARS Interested in learning more about employment law issues directly from the experts? Check out the Carswell Professional Development Centre's live and on-demand webinars discussing topics such as compliance under the Ontario's sexual violence and harassment plan act, managing hidden disabilities, harassment investigations, and HR and payroll implications of employee terminations. To view the webinar catalogue, visit cpdcentre.ca/hrreporter. Compensating employee for use of own vehicle Question: If an employer requires an employee to use her own vehicle for work, what does the employer have to provide to compensate for wear and tear on a vehicle, if anything? Termination pay before and after signing release Question: Can an employer provide the legal minimum of pay in lieu of notice for dismissal and then offer the equivalent common law notice in exchange for signing a release? Answer: e simple answer is yes. A release is binding on an (ex)employee if suffi cient consideration (payment) is provided to the employee in exchange for him providing the release. However, because employers are required by law to provide a proscribed legal minimum of pay in lieu of notice when dismissing an employee without cause, an employer cannot acquire a valid and binding release if it asks the employee to sign a release only in exchange for paying the statutory minimum pay in lieu of notice. An additional payment beyond the statutory minimum must be paid in order for a release to have suf- fi cient consideration to be binding and valid. erefore, if an employer wishes to ac- quire a binding release, it must pay some sum of money in excess of the statutory minimum pay in lieu of notice in exchange for the release. at "excess payment" does not have to be equivalent to the statutory notice — it can be any amount that is paid in excess of the statutory minimum. While common law notice includes the minimum statutory notice, it is the amount of money paid in excess of the minimum statutory notice that makes the release binding. For example, if the minimum statutory notice is four weeks, and the common law notice is 16 weeks, then it is the 12 weeks paid in excess of the statutory notice which constitute con- sideration to bind the employee pursuant to the terms of the release. In other words, if an employer wants a binding release, it must pay more than the statutory minimum pay in lieu of notice to the employee in exchange for the release. Meghan McCreary is a partner practicing la- bour and employment law with MacPherson Leslie & Tyerman LLP in Regina. She can be reached at (306) 347-8463 or mmcreary@ mlt.com. Answer: An employer is not required by any statute or regulation to pay all or part of an employee's vehicle expenses. If that benefi t is not negotiated as part of an em- ployee's employment contract, than the employee can claim a tax deduction for ve- hicle expenses if she meets all of the follow- ing conditions: 1. e employee is normally required to work away from the employer's place of business or in diff erent places. 2. Under the employee's contract of employ- ment, the employee has to pay his own motor vehicle expenses. An employee is not considered to have paid his own mo- tor vehicle expenses if the employer re- imburses him or if the employee refuses a reimbursement or reasonable allowance from the employer. 3. e employee did not receive a non-tax- able allowance for motor vehicle expens- es. Generally, an allowance is non-taxable when it is based solely on a reasonable per-kilometre rate. 4. e employee keeps with his records a copy of Form T2200, Declaration of Con- ditions of Employment, which has been completed and signed by the employer. e types of expenses an employee can deduct include: • fuel (gasoline, propane, oil) • maintenance and repairs • insurance • licence and registration fees • capital cost allowance • eligible interest paid on a loan used to buy the motor vehicle • eligible leasing costs. If an employer provides a fl at rate vehicle allowance ( not based on the number of kilo- metres driven), that is a taxable benefi t that is included in an employee's income. If an employee is reimbursed on a per-ki- lometre rate that the Canada Revenue Agen- cy considers reasonable, that is not a taxable benefi t, and the allowance is not included in income. Employees can deduct expenses of operating vehicles for business from their taxes. Anything more than statutory minimum can be linked to signing release

• Cover