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Feature: Labour and employment landmines

|Written By Jennifer McPhee

There are certain labour and employment issues that can catch corporate counsel off guard. How do you accommodate an employee going through sex reassignment surgery? What about an employee with a substance abuse problem who is in denial? What do you do when former and current employees launch a class-action suit against your company?

For employers and general counsel, labour and employment law can feel like a danger zone with the potential for frightening consequences jumping out at them from around every corner.

Canadian Lawyer INHOUSE has identified three potentially explosive situations that a corporation may grapple with at some point over the course of its lifespan, and asked the experts for advice on what to do.

Confronting employees about disabilities

Employers sometimes suspect that a downturn in an employee’s performance is related to a disability, but what happens when the employee denies they have a disability or that they require accommodation? Arbitrators and courts have determined that employers cannot simply ignore clear signals that an employee has a disability and proceed in a disciplinary way, so how should employers handle these delicate circumstances?

Experts say this situation most frequently arises when an employee has a stress-related problem, addiction, or mental-health disability.

“It actually comes up more than you would think,” says Cheryl Foy, vice president, general counsel, and corporate secretary for Tundra Semiconductor Corporation in Ottawa. She estimates that about 25 per cent of instances of declining performance can be linked to an illness that an employee may or may not be aware of.

Whenever an employee’s performance declines, Foy counsels the human resources or management team to consider whether the change may be related to a disability in every case.

She stresses that they should always treat the employee with respect, but advises talking to the employee about their performance (using concrete examples and time lines) and to ask questions around why the employee thinks their performance has slipped. The idea is that the employee will draw the connection themselves and request accommodation if they need it, she says.

“We might have suspicions that the disability is causing the performance issue,” she says, “but I would never want to draw that conclusion without input from the employee or confirmation from the employee. I wouldn’t just say, ‘No, you are sick so you can’t perform your job, and we’ve decided that.’ It’s not up to us to decide that sort of thing.”

?But when an employee’s problem seems clearly related to an addiction (and the employee is not just someone who drinks occasionally and exercised the wrong judgment once or twice), it’s necessary to confront the problem and have that difficult conversation, she says. Employees with addictions usually exhibit clear signs and symptoms, such as consistently failing to hand in reports, frequently calling in sick on Mondays, or arriving at work in the morning reeking of alcohol.

Foy advises the company’s human resources professionals to document all of these incidents and to present concrete examples to the employee. She advises telling the employee what they think is causing the problem so that the employee can respond.

However, all of this should be done in a way that emphasizes the employer is not looking to penalize the employee, but wants to assist by providing accommodation, which typically involves paid time off and rehab, she says.

Since people with addictions have to be ready to deal with them, some employees will acknowledge they have a problem and accept the help the employer is offering, but others get extremely defensive and angry.

If an employee outright refuses to accept help, and his or her performance doesn’t improve, it’s probably time to end the relationship. “In my view, if you can’t get them to accept help, then there’s nothing you can do to accommodate them,” says Foy. “But you don’t want to make that judgment until you’ve tried just about everything to help them.”

Vancouver equality rights lawyer barbara findlay had to confront an employee about his alcohol addiction in her former position as a manager of a legal organization. The employee, who worked from a remote office, began coming to work intoxicated and even started missing court dates.

“What we did was say to him, ‘This is not acceptable. You are not carrying out the functions of your job. We are happy to make provisions for you to go to rehab, but you can’t come back to work. So if you don’t go to rehab, you are going to lose your job.’”

Another even more delicate situation involves deciding how to confront an employee with a possible mental-health problem. When findlay was faced with this situation — one of her employees began acting out erratically in the workplace — she handled it by asking the employee to get a medical assessment to determine whether or not she needed to take stress leave.

Obviously, an employer can’t just ignore an employee that appears to have a mental-health problem that’s impacting his or her work, but there’s no one-size-fits-all solution, says Michael Fitzgibbon, a labour and employment lawyer at Borden Ladner Gervais LLP in Toronto.

“At a certain point, the employer might be required to force the issue, and those are very, very difficult situations, so you’d definitely want to speak to someone before you take any action” he says. “There are many, many cases out there now where employers are held to a very high standard of behaviour as it relates to employees who have a disability, whether it’s mental or physical.” 

When Sam becomes Samantha

Transsexuals classically describe themselves as being born in the wrong body. And when they decide to undergo sex reassignment surgery, society may still view them as changing their gender, but they strongly feel the change means their body will finally match the gender they’ve been all along.

Vancouver-based findlay, who frequently advises clients about transgender issues and has acted for transsexuals in numerous human rights cases, says employers typically ask two questions when an employee decides to have sex reassignment surgery.

“Do I have to let this person transition on the job? From their perspective, what it looks like is, do I have to let his guy wear a dress to work? The answer is yes, you do.”

“[They also ask] do I have to let this girl use the men’s washroom? Because [employers] will continue to perceive the person as the wrong gender. And the answer is yes, you do.”

In order to have sex reassignment surgery, transsexuals are required to undergo a ‘real-life test’ by living in their target gender 24 hours a day for a period of time to experience what it’s like.

In other words, in the time period leading up to the surgery, an employee previously known as Sam will now come to work dressed as Samantha and expect to be treated as Samantha, or vice versa.

During the real-life test, the employee will also be taking hormones, which will result in changes to his or her appearance and behaviour. Taking estrogen, for example, may cause someone to become more emotional, says findlay.

Typically, before an employee embarks on this real-life test, they will tell their employer what they are planning to do and sometimes request sick leave in order to, for instance, adjust to the hormones before returning to work.

“The employer should treat that as a medical-leave issue,” says findlay.

And when the employee returns to work, they will arrive as their target gender. So how should an employer prepare staff for what’s to come?

The best strategy for the employer is to speak to the transitioning employee to come up with the best way of explaining what’s happening to the other employees, says findlay.

“It’s not something that you can not explain. There’s no getting around it. The employee is likely to have a new name and is gong to want to be referred to by their new or confirmed gender.”

Since an employer’s goal should be to make the transition as smooth and unremarkable as possible for everyone, while making it clear to co-workers that they don’t have the right to harass or mistreat the employee, it’s a good idea to consult one of the agencies that deals with transgendered people, says findlay.

Often, employers will bring an expert from one of these agencies into the workplace to speak to staff, she says.
By far, the most problematic issue for co-workers is the question of which washroom the employee should use during the real-life test. Findlay says there is only one answer — the washroom of the employee’s target gender.

“In other words, if it’s a male to female, that person uses the women’s washroom, and if it’s a female to male, he uses the men’s washroom.”

Co-workers don’t generally make a fuss about which washroom the employee should use after the surgery. It’s pre-surgery that the washroom issue causes the most consternation, she says.

“That’s because we as a culture are so genitalia focused that we can’t recognize that what we have here is a woman, who, tragically, has had to go around her whole life with a penis. It’s a torment. For her, using the men’s washroom is gross and inappropriate and dangerous. But we, collectively, don’t necessarily get that initially.”

Warding off employee class actions

Imagine finding out that your employees have started a class action against your corporation. The press release sent out by plaintiff's counsel says your company has done something illegal. And, even if the class action has no merit, because class actions are procedural, the merit stages of the class action likely won’t take place for years, if ever, says Barry Glaspell, a class action specialist at Borden Ladner Gervais LLP’s Toronto office.

“So the exposure for class actions is not that you’re finally going to be held liable for something,” says Glaspell. “The exposure is having it hanging over your head with the requirement to expend legal fees and expert fees, and it interferes with your ongoing business. You then have employees who are suing you rather than doing the work they are supposed to be doing.”

Glaspell, whose class action work is mostly on the defence side, believes that class action exposure for corporations involving employees is now much more limited when it involves past employees compared with present employees.
“Although it’s been rare for present employees to sue a corporation, that is going to be the class action of choice in the future,” he predicts.

Fortunately, for employers who are willing to take proactive steps, three recent Supreme Court of Canada decisions create a road map for Canadian businesses to potentially ward off this type of class action, he says. 

In two of these cases (Dell Computer Corp. v. Union des consommateurs and Rogers Wireless Inc. v. Muroff), the top court
dealt with arbitration clauses and whether these clauses could preclude a class action.

In the third case (Bisaillon v. Concordia University), the court dealt with a union setting, and whether the procedures available under the collective bargaining agreement had to be followed instead of proceeding with a class action.

“In each case, the court held that a class action could not go forward because there was an alternative procedure that had
been contractually agreed, namely an arbitration clause or a grievance procedure,” he says.

In light of these decisions, employers in non-unionized settings would be wise to review all contractual relationships with employees when a standard form contract is used over and over again, and to add two provisions to these contracts.

The first should state that the employee contractually agrees to raise any problem or complaint or claim or dispute with the employer, and that the employer be given a period of time to resolve it. The second provision should state that if the employer fails to resolve the dispute to the satisfaction of the employee, that the claim or dispute be required to go to mandatory arbitration to be exclusively decided by an arbitrator.

Often in class actions, the defendant first finds out about the action by reading the newspaper, he says. And the reason for this is because the defendant proactively does not want the claim settled because they want to use leverage through a class action.

“Corporations should try to curb that behaviour through contractual provisions and the Supreme Court of Canada decisions
give them at least a possibility of doing that.

“First it gives a contractually agreed outlet to resolve the problem other than through a court,” he says. “Secondly, class actions may be excluded through this contractual process by virtue of the terms of the [Ontario] Class Proceedings Act.

“And thirdly, if that’s not the case, the class proceedings legislation has what’s called ‘preferable procedure provisions,’ and if you have these contractual terms, you at least have an argument that the resolution should have been done informally and not through a class proceeding.”

He notes that in unionized settings, the process for doing this will be different, but conceptually the same.

Overall, employee class actions are fairly rare because they are generally limited to non-unionized, large corporations that breach the law or fail to, for instance, pay in a way they have agreed to, says Robert Reid, a partner at Lancaster Brooks & Welch LLP in St. Catharines, Ont. Although Reid is a management-side labour and employment lawyer, he has represented former employees in class actions.

Although there are exceptions, unionized employees tend to proceed through a grievance process instead of through a class action, he says. And employees at small companies tend to form small groups and proceed through the regular court process or initiate individual claims. And generally, class actions are rare because most corporations are organized to comply with the law.

Even so, employers can take steps to prevent class actions in advance. And, in most cases, employers will not be totally unaware that trouble is brewing, he says.

“Normally speaking, someone raises [the problem] with the employer. They don’t just say, ‘Here’s a letter from a lawyer that says we’re suing you on a class action.’ So the first thing the employer should do is investigate that kind of complaint up front.”
Corporations are most at risk of facing a class action when they make a change without first identifying and managing the risks involved, he says.

For instance, when an employer decides to change its benefit plan for retirees or to change the number of hours that employees work. He notes that past employees generally feel freer to sue because they don’t have to come to work every day and say, “Hi, I’m the one that’s suing you.”

Seek legal advice in these situations before the horse is out of the barn, he advises. “So before you actually do the deed, you find out there’s some risk, so how are you going to manage that? Let’s communicate with our retirees, let’s see if we can get some buy-in. Let’s see if we can do something that makes sense in terms of optics.”

Reid also cautions employers not to be wilfully blind. For example, if an employer is aware that employees frequently work through lunch or put in extra hours without being paid overtime, the employer can’t rely on the fact that it didn’t authorize the unpaid overtime, he says.

“We certainly tell people to comply with the law, keep records, be aware, don’t be wilfully blind, and identify areas of risk,” he says.

“I tell my clients, pick up the phone before you make a decision so we can talk about what the effect of it might be. The name of the game is limiting your claims, which means limiting your costs as an employer.”