mining seminar april 2015

Mining seminar

Restructuring the workforce

April 15, 2015

1

Jillian E. Frank, Partner

Labour & Employment Practice Group

Restructuring the Workforce

April 15, 2015 2

1. Amending Employment Contracts and Constructive

Dismissal

2. Contracting Out and Successorship

3. Downsizing and Termination Obligations

4. Adjustment Plans

5. Liability for Unpaid Wages

Outline


April 15, 2015 3

• What does the Employment Agreement say?

• Issues to consider:

• Consideration for changing the employment agreement

• Constructive dismissal for changes that are fundamental to the

employment contract

Amending Employment Contracts


April 15, 2015 4

Wronko v. Western Inventory

• 2 year “sweetheart deal”

• Employer advised the employee that his notice period would change in 2 years

• Employee objected and continued to work. No notice of termination was

provided.

• After 2 years, employer imposed the new employment contract.

• Employee rejected, and sued successfully for constructive dismissal

“I cannot agree that an employer has any unilateral right to change a

contract or that by attempting to make such a change he can force an

employee to either accept it or quit.”

Constructive Dismissal – Wronko case


April 15, 2015 5

1. Employee may accept the change in the terms of employment, either

expressly or implicitly through apparent acquiescence, in which case

the employment will continue under the altered terms.

2. Employee may reject the change and sue for damages if the employer

persists in treating the relationship as subject to the varied term.

3. Employee may make it clear to the employer that he or she is rejecting

the new term. The employer may respond to this rejection by

terminating the employee with proper notice and offering re-

employment on the new terms. If the employer does not take this

course and permits the employee to continue to fulfill his or her job

requirements, then the employee is entitled to insist on adherence to

the terms of the original contract.

Constructive Dismissal – 3 options from Wronko


April 15, 2015 6

• Decision of BCCA in Allen v. Ainsworth Lumber Co. Ltd., 2013 BCCA 271

• Problem in Wronko and Ainsworth:

• Employee was entitled to a fixed contractual notice period

• The employer could not terminate without paying damages

• No obligation on the employee to mitigate

• Options available will depend on the terms of the Employment

Agreement

• Right to amend agreement unilaterally?

• Limited notice provision?

• Duty to mitigate?

• Working notice?

Constructive Dismissal – Continued


April 15, 2015 7

Successorship:

• Employment is deemed continuous and uninterrupted

• Employees are deemed to quit if they do not accept substantially similar

employment with the new employer

• New employer must recognize service with previous employer for

vacation and termination entitlements

• Collective bargaining relationship continues with new employer

• No termination pay owed by the previous employer under ESA

• At common law, previous employer may be responsible for severance if:

• Employment agreement provides for notice and no duty to mitigate

• The new employer terminates employment within the notice period

Successorship


April 15, 2015 8

• Under the ESA:

• Abbott v. Bombardier Inc., 2007 ONCA 233

• Employer transferred its information technology department to a new employer

• Employees accepted employment with the new employer and continued to

maintain their seniority.

• Former employer was not required to pay severance because contracting out

employees is a “sale of a part of a business” under the ESA successorship

provisions.

• The Court did not apply the more restrictive test under the Ontario Labour

Relations Act for determining whether a sale of a business had occurred.

Contracting Out and Successorship


April 15, 2015 9

• Under the Labour Relations Code

• Contracting out is subject to the terms of the collective agreement

• Leeds Enterprises Ltd., BCLRB No. B271/96:

…there has been no transfer of a "business" for purposes of a

successorship where there has been a mere transfer of work with no

transfer of other components of a business, such as equipment, supplies,

good will or management personnel… If the work contracted out remains

part of the predecessor employer's business and the predecessor

employer has merely changed its method of carrying on business, and

most of the traditional indicia associated with successorship are absent, no

successorship will likely be found.

Contracting Out and Successorship


April 15, 2015 10

• Under the ESA, employers are responsible for both individual and group

termination pay

• Individual termination pay ranges from 1 week to 8 weeks

• Group termination pay is payable for a termination of 50 or more

employees at a single location over a 4 week period

• Group termination pay:

• 8 weeks, if 50 to 100 employees affected

• 12 weeks, if 101 to 300 employees affected

• 16 weeks, if 301 or more employees affected

• Notice to union and Ministry also required

• Penalty for breach? R. v. Servisair Inc., 2011 BCPC 142

Termination and Group Termination


April 15, 2015 11

• Section 54, Labour Relations Code:

• Measure, policy, practice or change that affects the terms, conditions or

security of employment of a significant number of employees

• 60 days’ notice to union

• After notice is given, employer and union must meet in good faith and attempt

to develop an adjustment plan, including alternatives, counselling, retraining,

severance, and benefit adjustments

• Does not apply if employees are exempt under section 65 of the ESA

• Definite term contracts; contract is impossible to perform (other than due to insolvency); construction

site; employees offered reasonable alternative employment

• Remedy for failing to give notice?

Adjustment Plan – Labour Relations Code


April 15, 2015 12

• Section 96, ESA

• Directors and officers’ personal liability for 2 months’ wages

• Includes vacation pay, termination pay and salary

• Corporate officers are not permitted to file a claim under section 96

• “controlling mind of Corporation”

• Exceptions:

• Termination pay if corporation is in receivership

• Company is subject to insolvency proceedings

• Vacation pay or banked overtime that becomes payable after director or officer ceases to hold office

• Can’t bankrupt the company after the fact and absolve directors of

liability: Re Davis

Liability for Unpaid Wages


13

Questions??

Mining seminar

43-101 and related considerations in mining disclosure

Brian E. Abraham, QC, P.Geo.

April 15, 2015

14

Technical report

• Nature of Report

• Exploration

• Resources

• Economic

• Preliminary Economic Assessment - PEA

• Prefeasibility Study - PFS

• Feasibility Study - FS

20 April 2015 15

Certificates

• Responsibility for different sections

• Site visit

• Experience in relevant area

Consents

• Avoid blanket consents

• Be specific in what is being consented to for the disclosure

20 April 2015 16

Materiality test

• Unwritten 20% threshold

• Metal prices impact

• Capital expenditures

• Operating costs

Metal prices

• Unique metals

• Diamonds and precious stones

• Reliance on non-QPs

20 April 2015 17

Resources

• Reasonable prospect for eventual economic extraction on all resource

categories

• Pit shells

• Underground operations from existing pit or proposed pit

• Preliminary feasibility study within the Pit shell

• Rounding of Resources and Reserves figures

• Economic analysis to include tax factors

20 April 2015 18

Non-independent QPS and reliance

• Legal

• Taxation

• Environmental

• Political

• Social

20 April 2015 19

Reviews

• CSA Staff Notice 43-309 – April 9, 2015

• Naming the Qualified Person

• Preliminary economic assessments and cautionary statements

• Mineral Resources and Mineral Reserves inclusion / exclusion

• Exploration targets and use of ranges

• Historical estimates – source, date, reliability, key assumptions, required

cautionary language

• Also consider:

• Data verification

• QA/QC

• Drill reporting grades/widths

20 April 2015 20

Notes

• Avoid words like “world class”, “spectacular”, “production ready” and

“ore”

• Avoid use of “anticipated economic analysis”

• Sites and presentations at conferences – booths are also reviewed

• Data verification statements

20 April 2015 21

Other factors

• Reliance on prior disclosed information

• Metal price assumptions

• Drilling information – true widths and hydrate intercepts

20 April 2015 22

Summary of 43-309

The significant concerns are the following:

• Naming the QP

• Preliminary economic assessment caution

• Resources are not Reserves

• Tax matters

• Exploration targets

• Historical estimates

• Resources including Reserves

• Metal price assumptions

• Effective dates

20 April 2015 23

Summary (cont’d)

• Cut-off grades

• Metal equivalencies

• Data verification

• Naming the laboratory

• QA/QC measures

• Higher grade intervals

• True widths

20 April 2015 24

BCSC review

• The BCSC will review on request prior to filing of a technical report where

there is a financing involved to provide preclearance

• TSXV review

• Required in many instances for property acquisition if property is material

20 April 2015 25

Policies

• 43 307 – preliminary economic assessments

• 43-309 as discussed above

• Production scenarios (Companion Policy 2.6)

• TSX policies

• TSXV policies

• 51-102 continuous disclosure obligations

• 51-102 F-2 Item 5.4 of AIF

• Qualified Persons and recognized organizations

• Foreign QPs

• Foreign codes

20 April 2015 26

Resources and reserves

• CRIRSCO (Committee for Mineral Reserves International Reporting

Standards)

• CIM best practices

• CIM Resources and Reserves Committee

20 April 2015 27

Discussion

• MD&A

• AIFs

20 April 2015 28

Watch points

• News Releases

• Material Change Reports

• Websites

• Conferences

• Booths and tradeshows

• Foreign Resource / Reserves reporting

20 April 2015 29

Dentons Canada LLP

250 Howe Street

20th Floor

Vancouver, British Columbia V6C 3R8

Canada

Thank you

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mining seminar april 2015

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