hiring and firing records
DESCRIPTION
In this presentation, Dentons' Cristina Wendel covers the following topics in relation to hiring and firing employees: - Job Advertisements & Application Forms - Pre-Employment Checks - Employment Contracts - Termination Letters - Releases - Reference LettersTRANSCRIPT
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HIRING AND FIRING RECORDS
CRISTINA WENDELDENTONS CANADA LLPOctober 9, 2013
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OVERVIEW• JOB ADVERTISEMENTS & APPLICATION FORMS – What employers should
and should not ask when hiring.
• PRE-EMPLOYMENT CHECKS – What checks are available? When should employers conduct checks on prospective employees?
• EMPLOYMENT CONTRACTS - Are they necessary? What should they include?
• TERMINATION LETTERS – What employers should and should not say when terminating an employee’s employment.
• RELEASES – When should they be obtained? Will they be enforceable?
• REFERENCE LETTERS – Should they be given? What should they say?
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HIRING RECORDS
Job Advertisements and Application Forms
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Key concernsDiscrimination allegations - Alberta Human Rights Act˗ Section 7 - prohibits discrimination in employment practices,
including hiring, on the basis of the protected grounds˗ Section 8 – prohibits applications, advertisements and inquiries
of applicants that express any limitation, specification or preference indicating discrimination on the basis of the protected grounds or would require an applicant to provide information concerning the protected grounds
˗ Protected grounds: race, religious beliefs, colour, gender, physical disability, mental disability, age, ancestry, place of origin, marital status, source of income, family status and sexual orientation
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How to minimize the risk of a discrimination claim:
Prepare a job description
Determine the core requirements and competencies required for the position
Tailor advertisements and application forms appropriately
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DO’S
• DO set out the requirements for the position in the advertisement
• DO request information in the application form that will enable you to determine if the applicant can perform the job.
DON’TS
• DON’T word the advertisement in a way that shows a preference, or could exclude a person or group of persons, based on the protected grounds.
• DON’T request information in the application form that would require the applicant to disclose information relating to the protected grounds.
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Exceptions:
Bona fide occupational requirement
Reasonable and justifiable contravention
Affirmative action/employment equity
Targeted recruitment – for greater representation of historically disadvantaged groups
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What else can I do to avoid discrimination claims but still obtain the information I need?
Make the offer of employment conditional on the successful results of pre-employment checks
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HIRING RECORDS
Pre-employment Checks
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Types of background checks:
• Reference checks• Medical and fitness tests• Drug & alcohol tests• Criminal record checks• Credit checks• Education and professional certification checks• Immigration and terrorism checks• Psychometric checks• Online/Google searches
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Key concerns
Privacy˗ consent˗ reasonable
Human Rights˗ protected grounds – discrimination allegations˗ bona fide occupational requirements
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Reference checks
Ensure consistency when references are checked
Obtain consent to contact references – especially current employer
“Confirmation of employment” reference – limited value
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Medical and fitness tests
Sometimes necessary to determine ability to perform key duties
Use least intrusive means possible
May trigger duty to accommodate
Disclosure of test results˗ third party provider will generally conduct testing ˗ test results disclosed to employer should be limited
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Drug and alcohol tests
Drug and alcohol dependencies are recognized as disabilities under human rights law
In Alberta, pre-employment drug and alcohol testing is generally allowed for safety sensitive positions
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Criminal Record checks
In Alberta, a criminal record is not a protected ground under human rights law
Privacy concerns
Requirements:˗ informed consent form˗ format of search results˗ fingerprint verification
Practical concerns – timing issues
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Credit checks
Generally for positions where the potential for fraud exists or the employee will deal with money or other sensitive information
Must show that check was reasonably necessary
Specific statutory requirements – Fair Trading Act (Alberta)
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Education and Professional Certification checks
Most commonly falsified on resumes
“Diploma mills”
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Other checks
Immigration and terrorism checks
Psychometric checks
Online or Google searches• Caution!
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Background checking policy
Consistency is key
Policy should be reasonable
Conduct only the necessary tests
Deal with consent and disclosure issues
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HIRING RECORDS
Employment Contracts
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Employment contracts can be oral or written
Why get it in writing?• certainty• clarity• proof• to include specific terms
• probationary term• termination clause• confidentiality clause • restrictive covenants
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Termination clauses
Employment Standards Code (Alberta) – statutory obligations• Minimum standards
Common law obligations• reasonable notice• key factors:
• age• length of service• remuneration• position• duties/responsibilities
• Can be significant
Contract must meet or exceed minimum statutory requirements but can limit common law obligations
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Confidentiality clauses• clarify what is covered• clarify expectations and obligations
Restrictive covenants• non-competition• non-solicitation• key is whether the restrictions are reasonable in the
circumstances• depends on:˗ certainty˗ geographic scope˗ temporal scope ˗ scope of business
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Form of written employment contract
Can be in the form of a simple offer/hiring letter or a formal contract
Other employment documents can be incorporated by reference - for example, policies and procedures
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How to ensure an employment contract will be enforceable
Make certain the minimum standards are met or exceeded –i.e. Employment Standards Code (Alberta)
Give the employee time to review the contract and obtain advice before signing
Have the employee sign the contract BEFORE starting work
Consider amending the contract if matters have changed over time
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HIRING RECORDS
Termination Letters
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A termination letter should be given to the employee in every case – advantages:
• Clarity – termination must be clear and unequivocal
• Trigger commencement of limitation period
• Limit liability risk (benefits, severance)
• Remind employee of ongoing obligations
• Compliance with statutory requirements
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What information should a termination letter contain?• Basics – employee name and address• Date the employment is terminated• Reasons for dismissal• What sums will the employee be receiving and when (statutory
payments)• What happens with benefits• Company property• Ongoing obligations• Severance offer• Release
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Reasons for dismissal
• Whether termination is with or without cause
• If with cause – provide brief summary of cause
• Leave the door open - after acquired cause
• Potential for finding of bad faith
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Date of termination
Effective immediately or working notice?• pros and cons• when appropriate
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Statutory payments
Employment Standards Code (Alberta)
• s.9(1): without cause termination – earnings must be paid within 3 consecutive days after last day of employment
• s.9(2): with cause termination - earnings must be paid within 10 consecutive days after last day of employment
• What are “earnings”?
• wages, overtime pay, vacation pay, general holiday pay and termination pay
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Benefits
Employers must choose whether to continue benefits or terminate
If working notice is given, generally should continue benefits throughout period of employment
If providing lump sum payment and not continuing benefits – consider including sum for value of benefits
Generally should terminate disability benefits and life insurance benefits when employment terminates
Check with benefits provider for continuation and conversion options
Advise employee of any conversion options and provide contact person
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Company property
List of company property that must be returned
Deadline (if not at termination meeting)
Appropriate person
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Ongoing obligations
If appropriate, remind employee of any ongoing obligations• contractual • confidentiality• intellectual property• non-solicitation• non-competition
Impose new obligations?• consideration will be required
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Severance offers
• Consider whether appropriate• with cause – gratuitous payment• without cause – reasonable notice• contractual requirements
• How much to offer?• finding the right balance• offer structuring – tax savings
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Form of offer – various options available:• lump sum
• salary continuance
• salary continuance with incentive
• combination
• other items – for example: counseling fees, extended benefits
• Offer should be conditional on the employee signing a release
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HIRING RECORDS
Releases
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When should a release be obtained?
Generally a release is recommended whenever the employer is paying more than the statutory amounts required
If the employer is only paying out the statutory amounts, but payment is made conditional on a release, the release would be unenforceable for lack of consideration
What if paying pursuant to a contract?• generally, will not be required unless it was a term of the contract
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Contents and complexity
Short form versus long form of release?
• will depend on the particular circumstances including:
• the employer’s liability exposure;
• the sophistication of the employee; and
• the stage at which it is being obtained.
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Release may include:
• potential human rights complaints
• confidentiality clause
• potential claims against other employees, directors, officers
• EI acknowledgement
• indemnity for withholdings
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Matters which could affect the validity of a release:
• Problematic language• Claims included• Consideration• Unconscionable• Undue influence• Independent legal advice• Duress• Knowledge about rights• Lack of capacity• Forgery• Fraud
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HIRING RECORDS
Reference Letters
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There is no specific duty or obligation on an employer to provide a reference letter to a departing employee
Employers should give careful consideration to requests for reference letters
Generally, employers should refuse to provide a reference letter only if the termination was based on serious misconduct which the employer is confident it can prove
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Why provide a reference letter?
• May assist in employee’s search for new employment
• May be part of the duty of good faith and fair dealing in the
treatment of departing employees
• No legitimate reason to refuse the request
• Avoid finding of bad faith
• Decreased hostility – more likely to settle
• Argue failure to mitigate
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What should the reference letter say?• Factual information˗ positions held˗ length of service˗ duties and responsibilities
• Include truthful, positive comments
• “Letter of employment” vs. “letter of reference”
• Do not embellish the truth
• Avoid the use of negative comments wherever possible
• Avoid subjective opinions – focus on objective facts
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Potential Liabilities
Liability towards the departing employee
• Refusal to provide a reference letter• bad faith
• Negative reference letter• defamation for untrue statements• interference with contractual relations• inducing breach of contract• increased notice period • bad faith
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Potential Liabilities
Liability towards prospective employer
• unnecessarily positive reference letter
• negligent misrepresentation
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Questions?Cristina WendelPartner
[email protected]+1 780 423 7353Dentons Canada LLP2900 Manulife Place10180 – 101 StreetEdmonton AB T5J 3V5T+1 780 423 7100F+1 780 423 7276
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The preceding presentation contains examples of the kinds of issues that businesses dealing with hiring and firing could face. If you are faced with one of these issues, please retain professional assistance as each situation is unique.