Canadian HR Reporter - Ontario

CANADIAN HR REPORTER JULY 2018 INSIGHT 19 Brian Johnston ToUgHest HR QUestioN Buying out entitlement to benefi ts If an employee is fi red without cause, entitlement rules vary by jurisdiction Question: When an employee is fired without cause, can the employer buy out the entitlement to benefi ts during the notice period? Answer: It depends on the juris- diction and legal basis for the no- tice period in question. Most jurisdictions have statu- tory minimum notice periods, but employees are normally entitled to an extended notice period at common law (reasonable notice or compensation in lieu). With respect to the statu- tory notice period, it depends on whether the particular jurisdic- tion requires benefi ts continua- tion during this period. For example, Ontario employ- ment standards legislation stipu- lates that during the statutory notice period, the employer "shall continue to make whatever ben- efi t plan contributions would be required to be made in order to maintain the employee's benefi ts under the plan until the end of the notice period." As a result, benefi t continuation is mandatory in Ontario through the statutory notice period. To the extent of any inconsistency, legis- lation trumps contractual agree- ments to the contrary. By way of contrast, there is no similar requirement in the Nova Scotia employment standards legislation. erefore, in Nova Scotia and some other jurisdic- tions, benefi t continuation dur- ing the statutory notice period can be treated in the same way as during any extended common law notice period. ere is no absolute legal en- titlement to benefi t continuation during any extended common law reasonable notice period. However, during any such notice period, an employer is required to make the employee "whole" with respect to any com- pensation — including benefi ts — that would have been received during that period but for the ter- mination of employment. If an agreement can be reached, an employer can "buy out" the employee's entitlement to benefi ts during the reasonable notice period. For example, the employer could be more generous in terms of the notice period duration or with some other benefi t, such as job transition counselling, and not provide benefi ts. Contractual agreements can replace entitle- ments that would otherwise apply at common law. If no agreement can be reached, employers should be aware that if coverage is nonetheless discontin- ued during the notice period, it is taking a risk should the employee fall ill with a condition that would have been covered, thereby incur- ring a loss. In that case, the employer could be liable for the expenses that the employee would have been en- titled to under the benefi ts plan. For example, in Brito v. Canac Kitchens, no agreement was reached and after long-term dis- ability benefi ts were discontin- ued at the end of the statutory notice period, the employee be- came permanently disabled dur- ing the extended common law notice period. e employer was held liable for the long-term disability the employee would have received had the benefi ts not been can- celled (not just the premiums). In that case, the employer was liable for a decade's worth of long- term disability benefi ts, because the employee was 55 years old and coverage would have continued until the age of 65. For more information, see: • Brito v. Canac Kitchens, 2012 CarswellOnt 760 (Ont. C.A.). Brian Johnston is a partner at Stew- art McKelvey in Halifax. He can be reached at (902) 420-3374 or bjohnston@stewartmckelvey.com. How should Canadian executives respond to the #MeToo movement? We pay our leaders handsomely to make those tough business decisions From freewheeling and free-tweeting presi- dents to the instantaneous amplifi cation of any topic on social media, organizational leaders are now caught in an almost daily cycle of having to analyze, review and de- cide on a thousand new opinions and per- spectives — often with a loud clock ticking in the background. When those topics and opinions have a potentially signifi cant im- pact on the mental and physical well-being of the employees un- der their care, then the need to be judicious increases ten-fold. Questions bubble up: "If I act quickly, but make the wrong de- cision, is that better or worse than seeing how this plays out?" "Do I move fi rst and take a posi- tion or wait to see how my peers, my competitors, my shareholders, my employees or even my govern- ment are responding?" "What is the cost of inaction on my people and my business?" We pay our executives hand- somely to make tough business decisions like this. And we also pay them handsomely to make business decisions that are fair, equitable, ethically right and mor- ally just. No one can deny the moral and ethical imperative of the #MeToo movement. What began as a tweet related to the allegations of sexual abuse and harassment by producer Harvey Weinstein is about rais- ing awareness of the scale of sexual harassment that occurs in our society — and bringing an end to it. Is this a very real problem af- fecting millions of people? Yes. Do we need to eradicate this problem wherever it occurs? Absolutely. The struggle though, when dealing with issues related to hu- man beings is that absolutes are great in theory, but remarkably hard in practice. In theory, discrimination and abuse of any fellow human be- ing is abhorrent and should be eradicated. Sadly, in practice, discrimina- tion still exists in shades from the overt to the subtle, from the ex- plicit to the implicit. Bluntly, we still wouldn't have diversity and inclusion initia- tives if those issues had been addressed. We wouldn't talk about ageism, sexism, racism, hiring inequal- ity, glass ceilings and leadership composition if we had eradicated these problems too. So, the question facing every single Canadian executive is "How critical is the #MeToo movement to our business and what action does it merit?" at starts with your culture. Why culture? Well, on a granular level, culture is fuelled by the way your organization behaves and makes decisions, the way your organization creates or dilutes the energy and capacity of its people, and the tone and tenor of its leadership. Importantly, a strong culture is a source of sustainable competi- tive advantage. Get it right and your organiza- tion is more adaptive to change, more attractive to world-class tal- ent, more creative in its problem- solving and more sought after by customers and clients. Get it wrong and the inverse occurs. Therefore you can't evaluate #MeToo in any meaningful way unless you're prepared to evalu- ate its impact on your culture, your capacity and your leadership. And then determine what you are prepared to do to address it. Merely surveying employees for a perspective will inevitably arrive at a theoretical answer — they'll rightly tell you it must be eradicated. If you rely on subjective opin- ions, your well-intentioned ef- forts will be hobbled from the start. It's about knowing versus as- suming. Diagnosing whether it actually exists within your organi- zation, where it exists, and to what magnitude is more practical and infi nitely more actionable. Equally important is how your organization defi nes very load- ed words such as "abuse" and "harassment." Organizations regularly fail to be explicit about how they defi ne critical terms — like collabora- tion, trust or respect — leav- ing employees to arrive at their own (often incongruent) defi ni- tions, which lead to inconsistent behaviours. In this case, that's unacceptable because the stakes are so high — explicit and unambiguous defi ni- tions are critical. But diagnoses and defi nitions are merely ground zero. How you choose to tackle what you find is where it gets interesting because — you guessed it — each organizational culture will have a diff erent view on this. Is coaching and training your response? To address unconscious bias, Microsoft launched an enterprise-wide series of videos. Starbucks closed stores for an afternoon. What constitutes an official complaint and a fi reable off ence? Organizations have a spotty track record of creating environments where whistleblowers feel safe to raise sensitive issues. Without feeling safe, how many will come forward and what's the likelihood this issue will linger within your company? Will you take a leadership posi- tion on this or wait for revisions to the law? Ultimately, only you and your executives can determine the re- percussions of action — or even inaction — on this topic. at rests solely with you. What you cannot do — par- ticularly for a topic as incendiary as this — is fail to determine your organization's definitions, and genuinely diagnose how much of an issue this really is, within your company. Ultimately, all organizations and all cultures are defi ned by what they reward — and what they tolerate. What is your organization's tol- erance for this particular topic? Hilton Barbour is a Toronto-based consultant with a love for marketing and a passion for culture. He can be reached at (647) 922-9300 or hilton@ hiltonbarbour.com. From freewheeling and free-tweeting presi- dents to the instantaneous amplifi cation of any topic on social media, organizational Hilton Barbour GUest CoMMeNtarY Merely surveying employees about their perspective will inevitably arrive at a theoretical answer — they'll rightly tell you it must be eradicated. If an agreement can be reached, an employer can "buy out" the employee's entitlement to benefi ts during the reasonable notice period.

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