Remedies in Employment Law (9:VI): Difference between revisions
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== B. Small Claims Court == | == B. Small Claims Court == | ||
For information on how to proceed with a claim in Small Claims Court, see Chapter 20: Small Claims Court. | For information on how to proceed with a claim in Small Claims Court, see [[Foreword to Small Claims (20:I) | Chapter 20: Small Claims Court]]. | ||
The Small Claims approach can often yield better results than claims filed with the Employment Standards Branch, particularly for cases involving termination of employment or payment of wages. For example, the ''ESA'' only requires an employer to pay one week’s wages per year of service notice to a | The Small Claims approach can often yield better results than claims filed with the Employment Standards Branch, particularly for cases involving termination of employment or payment of wages. For example, the ''ESA'' only requires an employer to pay one week’s wages per year of service notice to a maximum of 8 weeks for dismissal without just cause, whereas a common law award could extend to as much as 24 months’ wages. The Employment Standards Branch is also only able to award back-pay of up to six months, thus the client may wish to pursue a remedy in Small Claims Court if he or she is owed more than six months’ back pay. It may also be in the employee’s best interest to pursue certain claims through the Employment Standards Branch and others in Small Claims Court. However, keep in mind that civil court will not rule on a matter that is to be decided by the Branch. | ||
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Please note that employees may '''no longer''' seek to directly enforce rights under the ''ESA'' in civil court, and must instead use the Employment Standards Branch to enforce these rights (''Macaraeg v E Care Contact Centres Ltd'', 2008 BCCA 182). However, many of the interests protected by the ''ESA'' have parallel common law (contractual) remedies as well. A significant exception to this is overtime pay: employees have a contractual right to receive their normal hourly pay for all hours they work, but they can only make a claim at the Employment Standards Branch if they wish to receive 1.5 or 2 times their normal hourly rate for their overtime hours (an exception to this is if their employment contract specifically sets out that they will receive a higher rate for overtime pay, in which case this contractual right can be enforced in court). Each particular case should be reviewed fully before determining in which forum to proceed. | |||
Also note that Small Claims Court only has jurisdiction for claims up to $25,000. Employees with claims over $25,000 must either abandon the excess amount of the claim, or proceed to BC Supreme Court. Employees should consult a lawyer before proceeding in BC Supreme Court, as it can be quite complicated and costly. | |||
When naming the defendant in Small Claims Court, the employee should sue the body with which the contract of employment was made, unless he or she is alleging fraud or induced breach of contract – in which case, consider joining the shareholders or directors of the company. The employee may have to sue the parent company and the subsidiary if the parent company does the hiring, paying, and terminating. | |||
== C. The B.C. Human Rights Tribunal == | |||
If an employee or potential employee has been discriminated against on the basis of one or more of the prohibited grounds, see Chapter 6: Human Rights, [[BC_Human_Rights_Code_(6:III)#C. The Complaint Process | Section III.C: The Complaint Process]] for information on how to proceed with a complaint. If the employee was terminated from their position based on one of the prohibited grounds, they may be able to recover lost wages and compensation for injury to dignity, feeling, and self respect at the Human Rights Tribunal. | |||
The employee also has the option to file a claim in Small Claims Court or BC Supreme Court for wrongful dismissal: See [[Employment Law Issues (9:IV)#E. Termination of Employment | Section IV.E: Termination of Employment]] for information on wrongful dismissal claims. | |||
In most cases, the employee should choose one of these two options, based on which would provide the most compensation. For low-income employees who were employed for a short period of time, the Human Rights Tribunal can often provide greater compensation. However, in some cases where the employee has worked for the employer for a particularly long time before being terminated, or where the employer has demonstrated particularly egregious conduct, the employee may have better success in Small Claims Court or BC Supreme Court where they may be able to receive a larger severance award, and possibly punitive damages. | |||
It is possible to have the employee’s job reinstated by making a claim under the ''Human Rights Code''. This is a significant remedy in itself, and it can also be used to incentivize a former employer to make a fair settlement offer, as they often do not wish for the employee to return. | |||
== D. Limitation Periods == | |||
If a client wishes to file a complaint with the Employment Standards Branch, there is a six-month limitation period from the last day of employment. Applications to the B.C. Human Rights Tribunal must be made within six months of the alleged contravention (s 22). It is possible for this deadline to be extended if it is found that it is in the public interest to accept the complaint, and no substantial prejudice will result to any person because of the delay; however, it is rare for this to occur. In the courts, there was formerly a six-year limitation period for pure economic loss arising from breach of contract (wrongful dismissal would qualify); this limitation period continues to apply for any wrongful dismissal claims that arose before June 1, 2013. For wrongful dismissals occurring on or after June 1, 2013, the new ''Limitation Act'' applies, and there is instead a two-year limitation period (See ''Limitation Act'', SBC 2012, c 13). Section 124 of the ''ESA'' sets a limitation period of two years for any court action arising from an offence under the act. | |||
== E. Strategies and Tips == | |||
=== 1. Gather Evidence === | |||
Employees who face employment issues should document everything so that they will be able to provide better evidence if the case goes to a hearing or trial. Employees who are dealing with work-related or dismissal-related stress should consider seeing a medical professional as soon as possible, as medical evidence can be extremely helpful at the Human Rights Tribunal and in Court. Medical evidence is often necessary if an employee wishes to make a claim for aggravated damages due to the manner of their dismissal, as only actual losses are compensable under this category of damages. | |||
=== 2. Make a claim for EI === | |||
An employee who is dismissed may receive severance pay eventually; however, sometimes this can involve a long process. If the employee is receiving EI, they may have sufficient financial resources to wait a longer time to receive severance pay, and so they will be less likely to be forced to take a low settlement offer to pay their monthly bills. File for Employment Insurance immediately after being dismissed as Service Canada imposes time limits for filing. | |||
=== 3. Make Reasonable Efforts to Mitigate Damages and Track Mitigation Efforts === | |||
Employees must make reasonable efforts to mitigate their damages. This is most relevant if the employee has been dismissed; the employee will be making a claim for damages in lieu of reasonable notice in Small Claims Court, or a claim for lost wages at the Human Rights Tribunal, and they must make reasonable efforts to mitigate these losses by searching for similar work. The employee should document their search for work. Note, however, that if the employee is successful in finding work, they will have successfully mitigated their damages, and will therefore be entitled to less compensation for lost wages or reasonable notice. | |||
Employees should also be encouraged to keep accurate records of their job search efforts, for potential use as evidence at court. | |||
=== 4. File a claim as soon as possible === | |||
Once an employee finds a new job, they begin to mitigate their damages and this will reduce their severance award. File a claim as soon as possible; if you can reach a settlement agreement or have the case tried before the employee finds a new job, you may avoid this problem. | |||
=== 5. Complex vs. Simple Claims === | |||
If a claim is filed that is relatively simple, the employee is more likely to get through the process more quickly; this is helpful if you wish to try to finish the process before the employee gets a new job and begins mitigating their damages. However, there can also be benefits to adding claims for aggravated or punitive damages or various torts, and benefits to splitting a claim into more than one forum; namely, there is the potential for a greater award and the potential for tax advantages on the damages received. Consider the strength of the claims, how important it will be for the employee to receive money quickly, and the likelihood of the employee finding a new job and mitigating their damages, before deciding whether to make a simple claim for severance pay, or to add additional claims. | |||
=== 6. Consider the Tax Consequences when Negotiating a Settlement === | |||
An employee must pay tax on the portion of an award that is given in place of the wages they would have received during their reasonable notice period. However, if part of the damages is instead awarded as aggravated or punitive damages (in Small Claims Court or BC Supreme Court), or as damages for injury to dignity, feelings, and self-respect (at the BC Human Rights Tribunal), this portion of the award may not be taxable. Consider structuring a written settlement agreement to allocate a reasonable portion of the award to these potentially non-taxable categories of damages. Note that this chapter, and LSLAP, cannot provide tax advice, and an employee may wish to consult an accountant or tax lawyer or the Canada Revenue Agency to determine exactly which amounts of a final settlement are taxable. | |||
=== 7. Consider splitting the claim into different forums === | |||
In some cases, it may be advantageous to split up the various employment issues an employee faces, and proceed in different forums based on which forum will award the greatest amount of money for each legal issue. | |||
For example, one may wish to claim overtime pay and vacation pay at the Employment Standards Branch, and claim severance pay in Small Claims Court. This could be beneficial because overtime pay (at the 1.5 or 2 times hourly rate) is only legally required under the ''ESA'' (unless the employee’s contract calls for overtime pay to be paid), so claims for it can only be brought at the Employment Standards Branch; however, severance pay tends to be significantly greater in Small Claims Court. | |||
Often it will be best to keep the entire claim in one forum. Note that section 82 of the ''ESA'' states that once a determination has been made by the Employment Standards Branch, the employee may commence another action only if the Director gives written permission or the Director or tribunal cancels the determination. This prevents the possibility of “double recovery”; if an employee received damages for an action in one forum, they may not receive the same damages in another. However, even if an employee has already gone through the Employment Standards Branch to obtain the minimum statutory entitlement for length of service under the ''ESA'', they are still able to make a claim in court for contractual breaches such as wrongful dismissal, and therefore they may potentially obtain additional severance pay (''Colak v UV Systems Technology Inc'', 2007 BCCA 220). Nonetheless, proceeding at the Employment Standards Branch to claim the statutory minimum entitlements for length of service can be problematic for several reasons. Firstly, if the employee is also going to be proceeding in Small Claims Court for wrongful dismissal, a claim at the Employment Standards Branch may simply cause an extra expenditure of effort with no additional benefit. Secondly, if the Employment Standards Branch makes a determination as to whether or not there was just cause for dismissal, this determination is likely to be adopted by Small Claims Court if a claim is later filed there. It should be considered that of these two forums, only the Small Claims Court decisions are made by judges, so if it is anticipated that there may be complex legal arguments on the issue of just cause, it may be beneficial to proceed in Small Claims Court. | |||
