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Employment law-Inadvertent Dismissal-Employer Must Pay Medical Benefits and Costs
The Vancouver Sun - Business Section
26 January 2005     [More]

Business gives wary approval to B.C. privacy bill:
The Vancouver Sun - Business Section
16 May 2003     [More]

For your eyes only
Vancouver Courier–Cover Story
November 2003     [More]


No deliberate plan to force woman out, judge finds
Firm must pay medical benefits, court costs

Michael McCullough
Wednesday, January 26, 2005

A Prince George sawmill effectively fired a 20-year clerical employee by asking her to calculate softwood lumber duties, the B.C. Supreme Court has ruled.

Lakeland Mills Ltd. was ordered to pay Kathleen Fisher $2,000 plus 10 months' worth of medical benefits and court costs for "constructive dismissal" on Monday.

Fisher, 66, resigned from the company in the fall of 2003 after she failed to master a new software program to tally shipping costs and receipts, which factored in U.S. countervailing and anti-dumping duties.

Judge Robert Crawford characterized the case as a misunderstanding between well-meaning people that got out of hand.

"I do not find there was any deliberate plan by the defendant designed to force the plaintiff to resign from her employment as a result of the changes of her duties," he wrote.

Crawford went on to say, "A failure to communicate between a sensitive employee, an office manager seeking to plan ahead, and a kindly company president unhappily resulted in litigation."

The dispute might have been averted had Lakeland chief executive Keith Andersen offered to let Fisher stay on with the company in her old position as a receptionist and accounts payable/receivable clerk when she came to him to resign, the judge said. Andersen instead suggested her decision to retire was a good one.

"I do not fault Mr. Andersen one iota, but in terms of the contract law that applies, Ms. Fisher had been faced with unilateral changes of a substantial kind to her employment," the judge wrote. The situation was exacerbated by an aggressively worded letter Fisher's lawyer sent to Andersen that extinguished any chance of reconciliation, he said.

A employee is considered "constructively" dismissed when the employer unilaterally makes a fundamental change in the employee's contract. Should the employee resign as a result, he or she can claim damages from the employer in lieu of reasonable notice.

"Constructive dismissal is treated in law as an outright dismissal," said Janina Kon, a lawyer with Streamline Counsel Inc. in Vancouver and professor with the University of B.C. 's Sauder School of Business.

The courts only consider three questions in such cases, she explained. First, was the employee dismissed? If so, was there just cause? And finally, what is the reasonable notice required?

It may come as a surprise to most employers, but if they simply reduce an employee's pay or restructure their benefits, that constitutes a change in the terms of employment that could precipitate constructive dismissal.

Moreover, adverse business conditions or other pressures on the company are not considered just cause for dismissal, Kon said.

"What will happen with this case is it will open the door to a lot of other ones," she predicted.

The reason there aren't more cases of this sort already is that workers do not usually know their rights, Kon said. Managers, meanwhile, would do well to understand labour law or to seek counsel when re-assigning reluctant employees.

Among other things, workers are entitled to adequate training when they take on new tasks.

"The lesson is to make sure to manage your employees well, particularly when you are putting them through change," she said.

© The Vancouver Sun 2005



Business gives wary approval to B.C. privacy bill:
The law would control information collected and how it's handled

Author Michael McCullough, The Vancouver Sun (mmccullough@png.canwest.com)
Date 16 May 2003
Copyright 2003, The Vancouver Sun

Business groups are holding their noses with one hand as they give a wary thumbs up with the other to B.C.'s proposed privacy law.

"If we've got to have such a piece of legislation -- and we're not convinced that we do -- then what the British Columbia government has done is a vast improvement," said B.C. Chamber of Commerce president John Winter.

The Personal Information Protection Act, introduced in the B.C. legislature April 30, is easier to understand and implement than the federal privacy law it's meant to supercede on Jan. 1, 2004, Winter said.

Winter also gives Victoria credit for granting small businesses the tools to comply with the law. Through organizations such as the Chamber, the government will help teach businesses how to draft a privacy policy, appoint a privacy manager and audit their information management practices in accordance with the law.

"We think B.C. basically got it right," said John Gustavson, president and CEO of the Canadian Marketing Association. While marketing bodies especially will have to change many of their business practices if they have not already done so, "those changes are not unreasonable. Not a huge amount of red tape here."

The CMA particularly finds the grandfathering provision in the B.C. act preferable to the federal one.

"If you have consent to use personal information already, you can continue to use it and disclose it, so you don't have to go back and contact your customers all over again," Gustavson said.

Likewise Art Field, vice-president of the 850-member Private Investigators Association of B.C., said that while the law will make it more difficult for private investigators to carry out their work, it allows them more leeway than the federal law.

Following the lead of the European Union, which requires that its trading partners have laws protecting the privacy of individuals, the federal government enacted the Personal Information Protection and Electronic Documents Act (PIPEDA) in 2000. Already applicable to federally regulated companies and firms operating in more than one province, it becomes the law
of the land for every company on Jan. 1, except in provinces that enact their own, substantially similar legislation.

The B.C. law, which has neither been debated nor passed yet, is simpler but wider-reaching than PIPEDA, said Janina Kon, a lawyer and University of B.C. professor who consults companies on matters of privacy law. Most notably, it covers employees as well as customers, and affects associations and non- profit organizations as well as corporations.

"A lot of businesses don't even realize that this legislation is going to be affecting them," Kon said. "Pretty much every business and association and non-profit organization will be affected for the simple reason that they have employees."

In essence both laws require organizations to obtain consent from individuals to collect and keep information about them or transfer it to a third party.

The B.C. law will make it illegal for companies to perform a number of hitherto common business practices, Kon noted:

- Companies cannot outsource payroll services or management of benefits packages to another company without notifying and at least obtaining the implicit consent of their employees;

- Direct marketers cannot contact a consumer for the purpose of promoting or selling a different product or service than one they already supply him or her with, unless the consumer consents to obtaining such additional information or offers;

- Magazine publishers cannot rent lists of subscribers to other companies for the purpose of direct marketing;

- Companies cannot send unsolicited e-mail ("spam") to people with whom they have never done business (spammers outside Canada, of course, pose a problem of enforcement);

- Credit card issuers cannot send applications to individuals on the basis of their credit rating unless the individual consents to that information transfer;

- Employers must, on request, provide an employee with any performance evaluations or other records they collect and keep on the employee.

Perhaps the most important implication for businesses is the liability they assume for the protection of personal information, Kon added. Companies will now be subject to damages in court if, for example, personal information is stolen from an insufficiently secure filing cabinet or computer file.

"All it takes is one violation dealing with sensitive information and a corporation's reputation could be seriously affected," Kon said. She cites the case of ISM Canada; thieves stole a computer containing 800,000 names, social insurance numbers and bank account information from the data management company's Regina office last year. In the future the parties to this kind of data breach will face stiffer penalties in the courts.
Over the long term, Kon expects consumers and employees will become increasingly aware of their right to privacy and demand that companies respect it. One potential upside for business is that people put more trust in things like e-commerce. In her practice, Kon has also noticed that firms that undergo a privacy audit usually discover other ways to make their information management systems more efficient.

Still, it may be a stretch to demand every business, down to the corner store, devise a privacy policy when many don't even have a business plan.
As per the federal law, there are no exemptions for small business, said B.C. Management Services Minister Sandy Santori. However, the government intends to publish a boilerplate document that business owners can fill out to fulfill their obligation under the act.

"I think it's a landmark statute. We've taken a leadership role," Santori said. He notes that Ontario's privacy law has gone through 33 drafts without being passed, and other provinces such as Alberta are looking at adopting the B.C. provisions.

B.C.'s law must still be approved by the federal government to apply Jan. 1, however, and federal privacy commissioner George Radwanski has stated publicly that the B.C. act does not measure up to federal standards. In a letter to Santori last week, Radwanski criticized its over-reliance on implicit consent and the fact that it does not cover information gathered before the act comes into effect.

The B.C. Civil Liberties Association has come out in support of the B.C. law, despite some specific criticisms.

"I think the provincial government has taken a courageous and wise initiative in crafting its own act," said BCCLA executive director Murray Mollard.
"This is the 21st Century. I think privacy has become a consistent value that Canadians want to see protected and I think this is an important step to achieve that goal."

The Public Interest Advocacy Centre in Ottawa also offered qualified approval to the B.C. law, giving it a B+ in its legislative report card.
Janina M. Kon, BA (Hons.), LL.B., is a legal consultant and legal educator, and a member of the Law Society of BC. She has practiced privacy law in law firms in Vancouver, has been an advisor in human resources and labour relations in the largest private sector employer in BC, and has taught courses and facilitated law workshops at academic institutions and corporations. Janina is Sessional Faculty at the Sauder School of Business at UBC, and the President of a firm specializing in privacy compliance, training, and policy development.

For your eyes only

By Stanley Tromp-contributing writer

Lawyer Janina Kon is helping charities adjust to a new law that prevents businesses and non-profits from sharing personal information without consent.

A few years ago, Murray Mollard was walking down a back alley not far from his West Hastings office when he passed a dumpster containing some papers. It turned out to be bank correspondence that was full of personal data such as account numbers and balances.

At the time, Mollard, as executive director of the B.C. Civil Liberties Association, was preparing a submission to the Senate committee creating the new federal privacy act. "It was sensitive enough that it caused me considerable alarm," he says. "So I phoned up the bank and asked, 'How did this happen? What are you going to do about it?' I never learned the answer."

These days, new technologies allow for intrusions of privacy and abuses of personal data that were inconceivable years ago.

When you sign up for a supermarket club card and buy food with it, someone is keeping track of what you buy. When you donate to one charity, it's common to get calls from others. If you receive computer spam, or telemarketing calls at dinnertime, or have a mailbox stuffed with credit card application forms, do you ever wonder how they got hold of your contact information?

Governments are making an effort to stem the tide of privacy abuses by passing a new generation of privacy protection laws. In B.C., one of these-Bill 38, the Personal Information Protection Act (PIPA)-has already passed into law and takes effect in January.

Throughout the province, companies and charities have been mobilizing for Jan. 1, hiring "privacy officers" and training staff. Brochures explaining customer privacy policies are turning up in banks and video stores.

Lawyers are poring over the statute to prepare for civil lawsuits, while governments prepare web sites and a PIPA hotline to help the public.

It may sound dry, but the PIPA law's reach is wide: it will directly affect you if you've ever paid a phone bill, used an ATM, owned a credit card, joined a church's e-mail list, paid union dues, or subscribed to a newspaper.

The PIPA law sets up rules for how businesses and charities collect, use and share your personal information. Now they can only do so with your consent-oral, written, or "implicit"-and for specific purposes, on a strict need-to-know basis. They also have a duty to protect it and correct inaccuracies. PIPA requires every private-sector group in B.C. to institute its own privacy code, and hire a chief privacy officer.

Neil Brown, chief privacy officer of VanCity, says the credit union has been prepared for more than a year, having trained 1,600 staff from three to six hours each, at considerable expense. "It's more than a legal requirement. It's an ethical obligation. Our relationship with clients must be based on trust."

Personal information includes your home address and phone number, age, weight, height, marital status, social insurance and other ID numbers, medical and financial records, race or ethnic origin, educational and employment background, personnel file contents (such as performance reviews, letters of discipline). The definition doesn't include your name, job title, work products, business address or phone number.

If you think an organization has used your information improperly-for example, a charity has given your name and address to other groups that then solicit you for funds, the government insists you approach the organization first to seek an explanation. Chris Norman, director of the B.C. government's privacy branch, said government doesn't have the resources to police the PIPA law from the top down, which means the public has to do its own scrutiny of practices. But if that fails to satisfy you, you can call the office of B.C. Information and Privacy Commissioner David Loukidelis. If attempts to negotiate an agreement fail, he can issue a binding ruling, and an organization can be charged for not obeying it. Complainants can also sue civilly if they can prove damages from a privacy breach.

Loukidelis, however, worries that he lacks the resources to fulfill his current duties, even before his new PIPA enforcement tasks begin in January. During the 2001 election campaign, the B.C. Liberals promised to keep the Commissioner's funding stable. Yet after taking office, they cut Loukidelis' budget and staff by about one-third over three years, leaving a skeleton crew of 15. By contrast, the Alberta Commissioner's office, with half the workload, has a staff of 30.

There are also a few exceptions to your privacy rights. In some cases, your consent is not required to use personal information, such as during a medical emergency or fraud investigation (a controversial exemption). You also can't see your own records if doing so would invade someone else's privacy or safety or endanger law enforcement.

The PIPA law not only empowers customers, but employees too. As an employee, or charity volunteer, you can demand to see the personal information your employer holds on you, such as job evaluations. The law also guards against the improper sharing of those records. "How would you like to work in an office where your performance evaluation was left open on the boss's desk?" asks lawyer and privacy expert Janina Kon.

Governments had little choice but to respond to popular demand by bringing in privacy laws. A 2000 poll by Odyssey Marketing found that 92 per cent of British Columbians wanted such protection. They're not the only ones- when Americans were offered an option to be put on a telemarketers "Do Not Call" list, more responded than voted in the last U.S. general election.

One effect of the new law is to expose publicly for the first time the thriving but mainly unseen world of data exchange, which goes far beyond merely selling name lists to advertisers to creating an elaborate customer "profile" from many sources. Some people will even play a game to see who is distributing their information. For example, plain old Dave Smith might subscribe to one magazine using a name such as "David Q. Smith III," and if he later receives junk mail for David Q. Smith III, he'll know that magazine has sold his name.

The public push for the new laws was sparked by some grotesque privacy violations reported in the media-institutional blunders, which is a separate issue from the massive and growing crime of ID theft. For example:

ù In what sounds like an X-Files episode, sensitive personal medical files, which were sent from a medical center to a document disposal company for shredding and recycling, ended up being sold as props to the X-Files TV series in Vancouver.

ù In the highest-profile Canadian case, ISM Canada in Regina, a branch of IBM, had one of its hard drives stolen (it later discovered that an employee had taken it home). The drive held the personal data of one million people, such as their SIN, bank account and credit information. ISM could have said nothing, but set up call centres and sent letters of apology to all clients, urging them to do credit and bank account checks (to save ISM from liability), adding "we'll pay for it." A class action lawsuit is underway.

ù When an American charity held an online contest, the winners' names and addresses were posted online. One of the winners had a restraining order against her violent husband, but he found her address on the web site, and ended up beating her.

ù In mid-September, two Bank of Montreal branch computers filled with sensitive customer information were offered on the online eBay auction site. Geoff Ellis had bought the computers secondhand from Ecosys Canada Inc., a computer asset-management company based in Montreal. Ellis sells used computer equipment on eBay.com out of his parents' North York basement. The machines were posted for sale on the online site for six hours before he realized they contained hundreds of customer files, including account balances and information on lines of credit, credit cards, RRSPs, GICs and insurance. Privacy experts were appalled the computers had no password protection or encryption.

Two years ago, Ottawa's Protection of Personal Information and Protection of Electronic Documents Act (PIPEDA) came into force, overseeing industries regulated by the federal government, such as banks, airlines, and telecommunication companies.

The B.C. PIPA, by contrast, covers all provincially regulated companies, non-profits, political parties, churches and labour unions-right down to an individual or sole proprietorship, a lawyer in private practice or a hairdresser working at home. (A separate B.C. law to cover government activities, the Freedom of Information and Protection of Privacy Act, was passed in 1993.)

PIPEDA was passed partially because Canada risked being shut out of European trade. In 1995, the European Union passed its Data Protection Directive, which banned the flow of data from any EU country to a non-EU member country, unless that country had acceptable data protection laws. The United States is reluctant to pass similar laws but, for this economic reason, soon might have no choice.

Few would argue the good intentions of PIPA, yet the law has its critics. Former federal privacy commissioner George Radwanski wrote in May that, in his view, the PIPA had "very grave" deficiencies and is not "substantially similar" enough to the federal act, but his rebuke was mainly ignored after he was personally discredited by a scandal involving allegations of inappropriate expenses. The B.C. law is now widely expected to be accepted by Ottawa as sufficiently similar to the federal act.

While stressing that he supports PIPA generally, John Dixon, past president of the B.C. Civil Liberties Association, is offended by two clauses in the act.

First, it includes an exemption for "investigatory purposes," and the definition of the term-such as for breach of contract and securities violations-is broader than in the federal privacy act. "It creates a huge hole to collect, use and disclose personal information during investigations without consent," Dixon wrote to the government. Art Field of the 850-member Private Investigators Association of B.C., said that while the law will make it more difficult for PIs to do their work, it allows them more leeway than the federal act, which, for example, demands that suspicions that initiate an investigation be more than speculative.

Secondly, Dixon is concerned that PIPA allows organizations that hold personal information to give it out to PIs or police without the subject's consent. "It is certainly not an organization's responsibility to assist others in their investigations," he wrote. Sometimes this release is justified, he added, "but only if there is a court order, warrant or subpoena that requires disclosure."

By contrast, the judicial process has tighter checks on privacy protection, and so discourages "fishing expeditions."

Lawyer Michael Geist, writing in the Toronto Star this month, protested that privacy laws will be toothless unless the privacy commissioners publicly name-which they almost never do-the groups they find in violation. "Extensive media coverage understandably generates far more fear in the hearts of organizations than any prospective penalties or fines could cause since the harm to reputation inflicted by a front page headline detailing privacy abuses can cause damage that may take years to undo," he wrote. "[Not naming companies] hurts both companies that maintain good privacy practices as well as the general public."

Ironically, he adds, the Americans' aggressive enforcement of their milder privacy laws through government lawsuits may actually lead to better corporate privacy practices there.

Mollard generally agrees, but adds that the effect of the naming sanction might be weakened by overuse if the company's violation was minor, accidental or isolated.

As January approaches, PIPA has been met with bewilderment by many non-profit groups. In mid-September, 40 executives from B.C. charities and societies gathered in a large room in the downtown YWCA building to learn from lawyer and privacy expert Janina Kon what they can and can't do with their clients' records.

It was the first of four such one-day workshops, co-sponsored by VanCity Credit Union and the B.C. Law Foundation. Three times as many non-profit groups wanted to attend but the events were sold out.

"It could take four days to explain all this," Kon said. After outlining the PIPA's 10 basic legal requirements, she warned that non-profits could be sued for negligence if they fail to follow the rules, and that they're also responsible for the actions of their subcontractees -for example, a contract payroll company.

Kon provided the attentive audience with a range of tips: don't use a common network printer, disable employees' access codes when they leave the company, do spring cleanings of personal data that you don't absolutely need, don't leave bank account numbers on papers open on desks-instead, lock them up, even during coffee breaks-and note the distinction between consent "opt-in" and "opt-out." With the former, a company must ask for your personal information before taking it; with opt-out, it may initially collect the information without permission, with the presumption that you've agreed unless you specifically object.

Some of the new restraints are far from obvious. For example, Kon explained, "You can't wish an employee 'happy birthday' on the company web page if you reveal their age. But you can do it with their consent."

Beyond the new legal demands, why should the private sector expend money and energy to protect the public's personal privacy? For many reasons, Kon told them: ethics, safety, credibility, and commercial advantage over competitors. "All else being equal, would your clients prefer using a company or charity that has a strict privacy policy, or one that doesn't?" The answer, for delegates, seemed self evident.

B.C. companies are also struggling to cope with the new law. A PIPA panel discussion at a governmental privacy conference in Victoria Sept. 26 revealed the state of corporate uncertainty on the PIPA law. Norman recalled that companies were at first worried about the impending statute: "They asked, 'This isn't freedom-of-information for the business sector, is it?' No, we said. Then they relaxed."

In a slide show, Anita Fineberg, privacy officer for IMS Health, Canada's largest private health research company, outlined the "six C's" of the private sector's response to Canada's new privacy laws. Catatonic: most small and medium businesses. Confused: the health sector, because B.C. and Alberta's laws are different from the federal PIPEDA, and information crosses borders. Confrontational: some medical associations want to be exempt from PIPEDA-many doctors prefer to control their patients' records and consider it too much time and work to collect their patients' consent for its use. Conflicted: companies worry about the price tag of complying with the new laws, and want the privacy commissioners to consult more with them. Concerned: Canadian subsidiaries of EU companies with high profiles fear media or consumer scrutiny. Compliant: federally regulated industries.

To date, only B.C. and Alberta-and Quebec back in 1994-have passed private sector privacy laws, but Ottawa has yet to decide if B.C.'s law is adequate. If the federal government decides the provinces' privacy laws are not "substantially similar" to the federal PIPEDA, by Jan. 1, 2004, the federal law will be the standard across the country.

To prepare the PIPA law draft, Victoria held in-depth discussions with 170 groups-such as retailers, private health care, insurance companies, charities-who strongly supported the B.C. law as being far less complex to follow than the federal PIPEDA.

"If we've got to have such a piece of legislation-and we're not convinced that we do-then what the B.C. government has done is a vast improvement," said John Winter, president of the B.C. Chamber of Commerce.