Canadian HR Reporter

CANADIAN HR REPORTER May 29, 2017 6 NEWS Canadian Payroll Reporter is designed to keep you up to date on legislation, regulations, court decisions, technology advances and other developments that affect payroll departments. STAY ON TOP OF PAYROLL LEGISLATION To order your subscription call 1.800.387.5164 | 416.609.3800 www.payroll-reporter.com/subscribe Subscribe today for only $179 Order No. 20186-17 Payroll Reporter Can R Can R adian adian a www.payroll-reporter.com September 2016 see BRITISH COLUMBIA page 7 PM #40065782 Legislative Roundup Changes in payroll laws and regulations from across Canada News in Brief pg. 4 Feds still working to fi x Phoenix payroll problems|B.C. Tax Commission to issue report in October|Little change in average weekly earnings in May Ask an expert pg. 5 Reporting fake SINs|Successor employers and vacation entitlement |Maintaining benefi ts while on leave Alberta Reminder: Minimum wage rates going up The general minimum wage rate in Alberta will rise from $11.20 an hour to $12.20 on Oct. 1. The rate will now apply to liquor servers since the government is eliminating a separate minimum wage rate for them on Oct. 1. Other minimum wage rates are also going up at the beginning of October. The rate for certain salespersons specified in provincial regulations will rise from $446.00 per week to $486.00. The rate for domestic employees who live in their employer's residence will in- crease from $2,127 per month to $2,316. Labour Minister Christina Gray says the government will keep an see CONSIDER on page 6 Credit: Adwo/Shutterstock New folio pg. 3 The CRA has retired its Employee Fringe Benefi ts Employer Interpretation Bulletin and replaced it with a new Income Tax Folio chapter. Advocacy leads to changes Canadian Payroll Association works with government to ensure payroll's voice is heard BY SHEILA BRAWN CODES NOW replace footnotes on the T4. There are now higher thresholds for Can- ada Revenue Agency (CRA) and Revenu Québec accelerated remitters. There are now graduated penalties for late remittanc- es. The timeframe for issuing electronic ROEs now better aligns with pay cycles. These are just some of the changes the Canadian Payroll Association (CPA) has successfully advocated for governments to make in recent years. From source deduc- tions to year-end reporting to employment standards and workers' compensation, CPA president and CEO Patrick Culhane says the association regularly works with government officials and civil servants to make payroll-related laws more efficient and effective for employers, government, employees and the general public. "Advocacy is important to us," says Culhane. "Our core purpose is payroll compliance through education and see GRADUATED page 2 Payroll technology changes don't have to cause headaches Research, well-defi ned plan and stakeholder inclusion help transition BY KIM GROOME BECAUSE PAYROLL plays such a critical role, it can be easy to jus- tify keeping your existing solution even when it means managing work-arounds, manual processes and maintaining external spread- sheets. In spite of this, to provide the best possible experience for em- ployees and to make a more strategic impact in your organization, The Canada Revenue Agency in Ottawa has worked with the Canadian Payroll Association through the years in making changes to payroll-related laws. the employee, it renders the entire exercise moot." It's definitely good news for employers, said Amy Sherrard, a labour and employment lawyer at Hicks Morley in Toronto. "A lot of employers have con- cerns about providing substantive references and references checks out of fear of the potential con- sequences, and I think that this decision is fairly clear that, in the right circumstances, even where a substantially negative reference is provided, as long as you're provid- ing candid and truthful reference checks, you're going to be protect- ed from liability from defamation." After this decision, employers may be more willing to provide more detail than the standard start-and-end date, said Trevor Thomas, barrister and solici- tor at Kent Employment Law in Vancouver. "(But) at the end of the day, this is still a court decision — people still ended up in court — and how many employers want to go through that process? So I think there's going to be employers who look at this and say, 'OK, let's give an honest opinion,' but others are going to say, 'I don't want to be pulled into any litigation… so I'm not going to do this.'" Background Papp was hired by Ernest Stokes, president and secretary/treasurer of Stokes Economic Consulting in Milton, Ont., in 2011 as a staff economist. In December 2013, he was terminated from his em- ployment by Aaron Stokes, Ernest Stokes' son. Papp emailed Ernest Stokes, who was in Florida, asking if he could put him down as a refer- ence, along with listing the type of work he'd done, and Stokes re- plied that was OK. In May 2014, Papp applied for the Yukon position. After the interviews, he was advised by Amanda Ho that he was the first- ranked candidate, but she still had to check his references before making an offer. Ho managed to reach Ernest Stokes in July 2014 and asked him a series of questions from a form. When she asked about Papp's quality of work, she noted Stokes said, "We were not that pleased." When Ho asked about how Papp got along in a team setting, he was said to have replied, "Not well. He has a chip." And when asked how Papp got along with his co-work- ers, Ho noted he said, "Not great- ly." Stokes also apparently said he "did not see any evidence" of Papp developing good working relation- ships, and when asked if he would rehire Papp, Stokes said, "No way." at same day, Ho told Papp he would not be offered the posi- tion, and later said it was because of Stokes' reference. At trial, Stokes said he became aware of issues between Papp and his co-workers and superiors after talking to several employees. ey spoke of Papp lacking respect for authority, demonstrating a poor work ethic and making inappro- priate comments. But Stokes still felt he could give a good reference about the former employee's tech- nical abilities. Defamation defence In reviewing the reference notes, the judge said there was no ques- tion Stokes' comments were de- famatory, in that: they would tend to lower Papp's reputation in the eyes of a reasonable person; the words did refer to Papp; and the words were "published," in that they were communicated to at least one person other than Papp. But Stokes raised the defence of justification, meaning the state- ments he made were substantially true. e judge agreed. Stokes also raised the defence of qualified privilege, as the words published in the context of a refer- ence check fall within the range of qualified privilege. is privilege can be defeated by proof of malice, but the judge "was not satisfied on a balance of probabilities that Er- nest Stokes acted maliciously." As a result, Stokes had a com- plete defence to defamation and there was no basis for punitive, exemplary or aggravated dam- ages, or damages on the basis of intentional infliction of mental suffering, said the judge. ere are two primary defences to defamation, said Kler, one being the truth, which is justification, and the second being qualified privilege, which basically allows for free speech in certain rela- tionships, and reference checks are one of them. "The key difference between qualified privilege and the truth is that in a situation of qualified privilege, if statements are later found to be untrue, there still isn't an action for defamation provid- ed the statements were not made maliciously." If defamation was found here, it would render the entire practice of reference checks moot, he said. "Why would anyone take the risk of providing a reference check?" said Kler. "If something like that can be considered defamatory, and a company can be liable for it, no company would ever risk it, it's not worth it. So at least this now provides at least some clarity on the employer's obligation and hopefully encourages employers to provide references." e court's decision was helped by all the verification Stokes did, as seen later with the witnesses, said Sherrard. "e court looked at whether there was any malice in the refer- ence Mr. Stokes had given, and be- cause he had taken steps to back it up, he genuinely believed it to be true, and he had tried, to the best of his ability, to mention some positive traits. e court looked at all of that, and said, 'at's re- ally not malice.'" In relying on the defences of justification and qualified privi- lege, Stokes had all his ducks in a row by speaking with other employees and having the infor- mation to substantiate his com- ments, said omas. "e court acknowledged that and said he didn't come up with this out of thin air, he actually had legitimate reasons for making the comments," he said. "The judge found that Mr. Stokes had a legitimate basis or le- gitimate reason to say these things to Ms. Ho, so it wasn't made out of malice, it wasn't made out of spite, the statements were made because that's how colleagues felt about him, these are things they saw, they felt, they experienced." e judge noted that Stokes was not reckless and did not accept at face value what had been told by Aaron Stokes, said omas. "He took steps to verify what he had been told by speaking inde- pendently with some of the other employees at the office." e case serves as a good re- minder for employers, he said. "Yes, you can make comments that are considered defamatory, but you have to be absolutely sure that you back these up with evidence." Best practices After speaking with colleagues about a former employee, like Stokes did, it might be best prac- tice to also have them write down or confirm their comments in writing, said omas. It's also helpful to have as much detail as possible — as seen with Ho's notes, which left some gaps in evidence — which could mean recording the telephone conversa- tions, he said. "On the other side, we have to be practical too, doing refer- ence checks, taking notes, going through tons of these a day… you have to balance it out." ere's no downside to taking detailed notes, said Sherrard. "For recruiters, certainly, (they should) try to take accurate notes because they're making a decision based on that reference and they should reflect the reality of the conversation." It's also a good idea for the person being interviewed to take notes, she said. "A best practice for employers, when you're providing a reference about employees, (is to) have your notes in front of you. And it's al- ways good to have records and keep your files." But with the Papp decision, employers should not feel they can say whatever they want carte blanche, said Sherrard. "It's important to make sure that your reference checks are truthful and you need to take steps to veri- fy information if it's not firsthand knowledge; make sure that your references are objective, and that there's a clear reason, and if you have evidence or support to justify a negative reference, that's always helpful," she said. "e more steps you take to verify the information, you're kind of securing yourself." e more detail, the better REFERENCES < pg. 1 You can make defamatory comments, but you have to back it up with evidence.

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