Effective July 19, 2016, the BC Government has expanded the exemption for accountants from the Employment Standards Act to cover all professional accountants now practicing as Chartered Professional Accountants (CPAs) or enrolled as CPA students. Previously, only the minority of accountants holding the predecessor designation of Chartered Accountant (CA) were exempt while the larger group of accountants holding the predecessor CMA and CGA designations enjoyed full protection under the ESA.  This change means that, in B.C., both accountants working in accounting firms and the larger number of accountants working in industry are not entitled to any of the basic employment rights protected by the Employment Standards Act. These range from the minimum wage to vacation, statutory holiday, overtime and termination pay, as well as statutory leaves such as maternity leave.  Employers who currently provide ESA-based terms of employment to their accountants will no doubt continue to do so, but have greater flexibility in setting employer policies. Because changing some employment policies may have legal implications, employers should get legal advice before making any changes to take advantage of this expanded flexibility.  Employers should be aware that other provinces such as Ontario offer much more limited exemptions from hours of work and overtime employment standards only.

The Supreme Court of Canada has confirmed in Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29,  that for federal sector employers, employees may claim “unjust dismissal” under the Canada Labour Code (CLC) and obtain remedies including reinstatement with back pay even where the employer is not asserting just cause for “firing” the employee and has offered or paid contractual severance.

A limited number of businesses in Canada are covered by the federal CLC rather than provincial employment laws. Most are either federal Crown corporations or involved in aboriginal government, banking, telecommunications, television, aviation or inter-provincial or international communications or transportation.  Since 1978 the CLC has included a right for dismissed non-union federally-regulated employees with at least 12 months of service to make a complaint of “unjust dismissal” within 90 days of the dismissal.  If a complaint is successful, an adjudicator has broad discretion to order a variety of remedies, including monetary damages and reinstatement.  A dismissal will not be found “unjust” where the employee was terminated for just cause and the remedy is not available in certain situations, such as where the termination is due to the discontinuance of a job or layoff for lack of work or where the employee has another remedy available (e.g. a discrimination complaint).  In the original court decision in Wilson, the Federal Court had ruled that the unjust dismissal remedy should not be available where the employer terminated without cause and offered contractual severance.

The court confirmed that the intent of Parliament in enacting the unjust dismissal provisions of the CLC was to provide non-union federally-regulated employees with protection against dismissal without cause similar to that enjoyed by unionized employees. Accordingly, the offer or payment of severance, however generous and whether or not it satisfies common law contractual notice or severance entitlements, does not make a dismissal “just” and deprive a dismissed employee from seeking a remedy under the CLC.

While this case has attracted a lot of attention, the decision actually confirms a long line of adjudicator and federal court decisions prior to Wilson, and therefore the result is not surprising.  It is important for employers to remember that a dismissed employee only has 90 days to make an unjust dismissal complaint.  Also, an employer can (and should) insist on a release of all claims, including unjust dismissal, as part of a negotiated severance package.  Further, a dismissal due to the discontinuance of a position or layoff cannot be challenged as “unjust” under the CLC.

The purpose of this update is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Roper Greyell LLP or any member of the firm on the points of law discussed. Interested parties are urged to seek specific advice on matters of concern and not to rely solely on the text of this bulletin.

The provinces and federal government have reached an agreement in principle to make changes to the Canada Pension Plan (CPP). The changes will be phased in over several years starting on January 1, 2019.  A brief summary of the changes is as follows:

1. by the end of 2023, CPP contributions will rise by 1% (to 5.95% of pensionable earnings) for both employers and employees;

2. by the end of 2025, the upper limit of pensionable earnings will increase in increments from the current $54,900 (in 2016) to $82,700; and

3. income replacement benefits will increase from one-quarter (25%) to one-third (33%) of pensionable earnings or from the current maximum of $13,110 to approximately $27,000 per annum.

The amount of the premium increase is relatively modest and will be phased in over five years. Employers should start budgeting for this increase in premiums and reviewing whether they should adjust their retirement contributions to reflect this cost and the corresponding increase in employee’s CPP pension benefits.  For Ontario employers, the CPP agreement means Ontario will not proceed with its much more costly Ontario Retirement Pension Plan legislation according to the Ontario government. Quebec, which has long operated its own separate Quebec Pension Plan in lieu of CPP plans to make its own enhancements later.

The purpose of this update is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Roper Greyell LLP or any member of the firm on the points of law discussed. Interested parties are urged to seek specific advice on matters of concern and not to rely solely on the text of this bulletin.