Canadian HR Reporter - Ontario

CANADIAN HR REPORTER JUNE 2018 INSIGHT 31 Understanding the potential of emerging blockchain technology Tool could impact range of human capital management business challenges Wherever you turn, someone seems to be talking about blockchain technology and how it's poised to change the finance in- dustry, among others. So, what is it, ex- actly — and what other industries could it impact? Blockchain technology first made a splash in the financial sector with the development of Bitcoin, a virtual currency, in 2009. Since then, Bitcoin and other virtual currencies, such as Ethereum, have received a growing amount of media coverage, for better or worse, as markets in the curren- cies hit record levels. As attention increased, there have been many attempts to explain the technol- ogy behind the hype. At its core, blockchain is a way of tracking transactions without a central authority. Let's say you owe me $5 and you want to send it to me. With blockchain, the verification pro- cess is tracked and distributed in real-time across a decentral- ized network. When you send the money, a program accesses a ledger (distributed across many computers), confirms that the $5 exists and that you have assigned it to me by noting my owner- ship. Each previous transaction is available for review and because the ledger isn't stored in a single place, it's theoretically impossible to forge an entry or counterfeit a transaction. Rather than viewing it as a dis- ruptive force, think of the technol- ogy as a shift in how businesses and systems operate. More than a financial tool… eventually Slowly but surely, applications are being studied that will spread the technology beyond the bank- ing system and into the business world, and that includes HR. At Monster, we see potential to practically apply the technology to a range of human capital man- agement business challenges. For instance, if you think of the hiring process, it's likely that ap- plications, interviews and salary negotiations come to mind. Yet, a significant part of the hiring pro- cess is verifying the information a candidate provides. Mostly, this is done by checking references and, maybe, educational creden- tials. Blockchain may provide an- other option. An example is a resumé verifi- cation system, which could have employers developing sophisti- cated employee profiles — essen- tially, an HR ledger — that could verify performance, work history and other data that would help in determining whether a candidate is a good fit. Such a system could cut out a significant portion of the time it takes to find, meet and assess a candidate for an open position, which is a boon for a company's bottom line. Additionally, this kind of sys- tem would be "always-on," which would mean you'd be assessing a potential candidate based on the skills he possesses, not just the skills he's added to his resumé. is could ultimately impact the interview process, eliminating the need for the stages of inter- views dedicated to skill checks. Instead, interviewers could focus on critical factors, such as cultural fit, goals and aspirations and the intangibles that contribute to a company's success. Transforming HR e weakness in the distributed resumé lies in lower-level employ- ees who don't necessarily have a job history that demonstrates their value to an organization. How- ever, blockchain could be used to provide verifiable information on a candidate's educational history and qualifications to reduce the risk of fraud while eliminating the need for applicants to provide of- ficial transcripts. Such a drastic transformation of the way we hire would require changes in the way we run that function. Legal and regulatory advancements would be needed to protect employees' privacy while still making the service use- ful for businesses. Beyond the benefits to HR, blockchain is poised to transform the way business is done in other areas. is applies to any func- tion dedicated to transactional administration — such as ac- counting, supply chain man- agement or legal. For instance, smart contracts — self-executing programs that track the terms of agreements — could eventually eliminate the need for legal in- volvement when vendors fail to deliver on their obligations. Such shifts would necessitate a change in the structure of a busi- ness, as well as staffing require- ments, which the HR function would naturally lead. Functions within a company dedicated to verification, administrative doc- umentation and co-ordination of those functions would be un- necessary. Blockchain has the potential to reduce transactional costs financially, and in terms of productivity. Preparing for tomorrow While HR professionals won't need degrees in advanced engi- neering or computer program- ming, the need for some familiar- ity with technology will increase as technologies play a larger role in business processes. We're al- ready seeing opportunities for "workplace translators" — em- ployees who can bridge the space between engineering or technical language and business jargon. Academic institutions are in- troducing cross-functional cours- es and degrees that marry data analysis and programming with business education. Most Cana- dian business schools offer de- grees in business analytics, while the Smith School of Business at Queen's University in Kingston, Ont., recently announced a mas- ter of management in AI. As data and machine learning play an increasing role in business decisions, the demand for such degrees will only increase. Blockchain's applications for HR are currently in the theo- retical stage, but it's important for professionals in the industry to imagine how it could affect various functions such as hiring, training and talent management. Evolving business structures will also necessitate massive trans- formations within organizations as the demands for certain func- tions will be lower, and for others will be greater. e key question you might ask is: When will this happen and how do I prepare for it? Unfortunately, there is no single answer. Larger employers that carry out and track many complex transactions will likely invest in the technology more quickly to lower transaction costs. Others may never find the benefits are worth the cost. As with most technological in- novations, we can't know for cer- tain how the rollout will affect us in the long-term. What is impor- tant is gaining a solid understand- ing of emerging technology and staying up to speed on the ramifi- cations to business. is can help ensure that when change comes, you're ready to embrace it. Angela Payne is senior vice-president and general manager Canada at Monster in Toronto. For more information, visit www.monster.ca. We're already seeing opportunities for "workplace translators" to bridge the gap between engineering or technical language and business jargon. Can we promote and then demote? Risk of constructive dismissal claim after moving employee back to original position Question: Can an employer promote an employee, then later move the employee back to her old position in a restructur- ing while maintaining her pay level from the promotion? Answer: An employer that pro- motes a non-union employee and later moves the employee back to a former position in a re- structuring may be faced with a claim of constructive dismissal, even if the employee's pay level is maintained. At common law, a constructive dismissal occurs where an em- ployer makes substantial changes to the essential terms of an em- ployee's contract of employment and the employee does not agree to the changes: Farber c. Royal Trust Co. Similarly, employment stan- dards legislation may provide em- ployees with statutory protection from constructive dismissal. For example, the British Co- lumbia Employment Standards Act states: "If a condition of em- ployment is substantially altered, the director may determine that the employment of an employee has been terminated." e determination of whether there has been a substantial al- teration to employment depends on the nature and degree of the changes. For example, if the move back to a former position is a sig- nificant demotion or would cause humiliation, it is more likely that a constructive dismissal will be found. Other substantial alterations could include changes in geo- graphic location, working condi- tions or responsibilities. In Evans v. Teamsters, Lo- cal 31, the Supreme Court of Canada ruled that there are cir- cumstances where an employee is required to return to work for the same employer to mitigate his damages following a constructive dismissal. is requirement to accept re-employment is based on several factors that assess whether the breach of the terms of employment was such that continuing with the employer would be unreasonable. Given the Evans factors, there may be circumstances where an employee must accept a move back to her former position due to the obligation to mitigate damages. Also, courts may allow an employer some leniency where an employee's position is changed as part of a bona fide restructuring arising from economic circumstances. In a unionized environment, the ability to move an employee back to his former position will depend on the collective agreement — perhaps allowing for a trial period following a promotion, where the employer is permitted to return the employee to the former position if the trial is unsuccessful and there would be no obligation to maintain the employee's higher rate of pay unless required. If the collective agreement does not provide for a trial pe- riod, or if the trial period has ex- pired, the agreement is likely to contain provisions that dictate what the employer must do in a restructuring situation. For more information, see: • Farber c. Royal Trust Co., 1996 CarswellQue 1159 (S.C.C.). • Evans v. Teamsters, Local 31, 2008 CarswellYukon 22 (S.C.C.). Colin Gibson is a partner at Harris and Company in Vancouver. He can be reached at (604) 891-2212 or cgibson@harrisco.com. Colin Gibson Toughest HR Question Angela Payne Guest Commentary

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