16 minute read
The Legal File
Understanding Employment Law
BY ANDREW PRIOR
Employment law issues span across all industries, but some issues are especially relevant to the construction industry. This article will discuss common legal issues facing employers in the construction industry. If you are facing any of these circumstances, we recommend you reach out to your legal advisor to obtain more information and advice on how to resolve the issue or minimize your risk.
WRITTEN EMPLOYMENT CONTRACTS Many employers and employees begin their employment relationship on nothing more than a handshake. However, a written employment contract provides several benefits.
Firstly, a written contract provides a record of the rights and obligations of both parties. This provides clarity and certainty of the terms of the employment relationship.
An employment contract can also limit liability. Employees who are terminated without cause are entitled to notice of termination, or pay in lieu of notice, pursuant to the Employment Standards Act (the Act) and the common law. The common law notice entitlement can be up to 24 months. An employment contract can limit this notice to what is required by the Act, which may be three weeks or less, depending on the circumstances. However, without clear language to indicate such a limit, an employer may be liable for pay in lieu of notice significantly exceeding the requirements under the Act.
An employment contract may also provide an employer with the right to make changes to the employment relationship, such as changing work duties, business restructuring, and other changes. Without a proper contract providing this right, employers will risk constructively dismissing employees when making changes. A constructive dismissal is treated as a termination without cause, and the employer may be liable for significant pay in lieu of notice.
If your employees work under an oral employment contract, it is advisable that you speak to a lawyer about implementing a written contract with your current and future employees.
INDEPENDENT CONTRACTORS Another key issue is the distinction between employees and independent contractors. This distinction has significant impacts on the legal obligations of the employer. Simply naming an individual an independent contractor is not sufficient to cement their status, and parties often fail to consider whether the facts of the working relationship support a designation as independent contractor.
Whether an individual is an employee or independent contractor will depend on the following: a. Whether or not the individual works exclusively for the company; b. The degree of control the company has over the individual’s work (such as when, where, and how the work is done); c. Whether the individual supplies their own tools and equipment; d. Whether the individual has the chance to obtain profit or risk loss; and e. The degree of integration between the individual and the business.
If an individual is in fact an employee, the Act will apply to the relationship, including employee entitlements to vacation pay, overtime, and statutory severance upon termination. The employer will be liable for payroll taxes and may face penalties for failure to deduct and remit income taxes. Further, upon termination, the individual may have a claim for pay in lieu of notice, which can cause the employer to be liable for up to 24 months of wages.
If you intend to retain an independent contractor, but any of the above considerations are engaged (especially if you are the exclusive employer), contact your lawyer to ensure that the facts support this designation and that your contracts are drafted accordingly.
TEMPORARY LAYOFF Employers may lay off employees for up to 13 weeks in a 20-week period. To do so, typically the employee must consent to the layoff in writing. Consent can be provided at the outset of the relationship in a written employment agreement, or it can be provided in writing in advance of the layoff.
Once the maximum layoff period is exceeded, the employer must pay severance as if it were a termination without cause. Notably, under section 65(1)(e) of the Act, employers whose “principal business” is construction are not required to provide statutory notice of termination under the Act for employees who are employed “at construction sites”. However, if the employer does not have an employment contract in place to limit the notice entitlement, it will be liable for pay in lieu of notice pursuant to the common law, which can be significant.
OVERTIME AVERAGING Overtime averaging agreements are useful in the construction industry, where timelines may require employees to work long hours. Such an agreement allows the employee’s hours of work to be aver-aged over a period of one to four weeks for the purpose of determining overtime pay, potentially saving the employer from an expensive payroll. However, an overtime averaging agreement must comply with section 37 of the Act, meaning it must: a. Be in writing; b. Be signed by both parties prior to the start of employment; c. Specify the number of weeks over which the averaging agreement applies; d. Specify the work schedule for each day covered by the agreement; e. Specify the number of times the agreement may be repeated; and f. Provide a start date and an expiry date for the weeks over which it applies.
While overtime averaging agreements may be a useful tool, in practice they are seldom compliant with the Act, which can result in significant liability for overtime pay. We recommend you speak to your legal advisor if you intend to use an overtime averaging agreement in your workplace.
Andrew Prior is a commercial litigation lawyer with Pihl Law Corporation in Kelowna.
Case of Inflated Builders’ Lien Claim
BY MIKE MORGAN
Arecent decision1 from the B.C. Supreme Court effectively provides a roadmap for what not to do when a dispute between a subcontractor and a general contractor arises on a commercial construction project. It provides a cautionary tale for how matters can spiral out of control and result in substantial and significant legal fees and damages being incurred when a contractual dispute is not addressed in a timely and reasonable manner.
The subcontractor in this case, a steel stud framing and drywall subcontractor on a residential condominium project, walked off the job after a payment dispute. It then issued bogus invoices and filed an inflated claim of builders’ lien on title to the project. It proceeded to pursue its inflated claims through an eight day trial only to concede in closing argument that its inflated invoices were not in fact what had been agreed between the parties as the amount owing at the relevant time.
The court granted judgment to the general contractor for the increased costs incurred to complete the subcontractor’s work and, in a separate decision2 regarding costs, also ordered “special costs” against the subcontractor meaning that the subcontractor has to indemnify the general contractor for the reasonable legal fees the general contractor incurred in defending the subcontractor’s claims through trial. The end result is that the subcontractor is liable not only for the judgment against it of over $130,000 but also is liable for the general contractor’s actual legal fees which will likely be tens of thousands of dollars more and may in fact approach the amount of the judgment itself. In addition, it will have paid its own lawyer as well. In the end, it will likely be out of pocket several hundred thousands of dollars all arising from a dispute that perhaps could have been addressed for a fraction of that amount if the subcontractor had taken a more practical and reasonable approach.
In terms of the inflate invoices, the court stated as follows in the costs decision about the evidence of the contractor: [7] In his direct evidence at trial, the plaintiff agreed that there had been a meeting on
December 18, 2015, but he denied that any agreement was reached limiting payment for the steel stud work performed on the first four floors. Further, despite Invoice No. 7801 appearing on its face to have been in respect of steel stud work on those floors, he contended that invoice was only in respect of “extras”.
[8] In closing argument, the plaintiff — without explanation — abandoned his position that Invoice No. 7801 was for “extras”. Further, he accepted the defendants’ position that he had, during the December 18, 2015 meeting, agreed to the value of the work he had performed on the first four floors; that he agreed to issue an invoice to reflect that agreement; and, that he agreed he would continue to work only on the drywall and concrete fill portions of his subcontract, performing no further steel stud work.3
At paragraph 10 of the costs decision, the court found that the subcontractor knew his claim was grossly inflated which it knew to be substantially untrue. That finding lead to the extraordinary and unusual result of special costs against the subcontractor as the court held the subcontractor’s deceit was calculated to “drive the general contractor from the judgment seat.” In other words, by pursuing knowingly inflated claims, it attempted to force the general contractor to drop its claims.
What could the subcontractor have done instead when the payment dispute arose? Clearly, issuing false invoices and filing an inflated claim of builders’ lien was entirely inappropriate. Aside from not engaging in that wrongful conduct, a potential better course of action for the subcontractor to have taken could have been: (a) when the payment dispute arose, the subcontractor should not have walked off the project. By doing so, it breached the subcontract and became liable to the general contractor for the costs incurred in finding a replacement subcontractor. Instead, it ought to have attempted to resolve matters with the general contractor before leaving the site; (b) if it believed the general contractor was in default by failing to pay amounts properly due and owing, it perhaps ought to have issued a notice of default instead of unilaterally terminating the subcontract by abandoning the site. Once the subcontractor left, the general contractor had no other option but to hire a replacement subcontractor; and (c) if either of the above did not resolve the matter, the situation could still have been resolved at an early stage if the subcontractor had not inflamed the situation by, among other things, filing an inflated claim of builders’ lien. By doing so, the general contractor was forced to defend its position and pursue the claim through trial at tremendous expense, all of which became the responsibility of the subcontractor.
Accordingly, as always, where a contractual dispute arises in the middle of an ongoing construction project, obtaining timely legal advice is critical before things escalate and before the parties become entrenched in their positions.
1. Kang v. My Gastown Development Limited Partnership, 2021 BCSC 1861 2. Kang v. My Gastown Development Limited Partnership, 2021 BCSC 2242 (the “Costs Decision”) 3. The Costs Decision, supra. note 2 at paras. 7-8 Mike Morgan is a partner in the Vancouver office of Lawson Lundell LLP practicing commercial litigation with an emphasis on construction disputes.
AFBC Architecture Awards
Full House Vancouver House
The AFBC Architectural Awards of Excellence are the highest level of architectural awards in B.C. The jury reviewed more than 106 submissions in order to select the recipients. The jury measured the overall quality of each submission based on the following criteria: Theory and Design Principles, Program and Client, Context and Site, Budget and Time Constraints, and Sustainability Principles.
The Lieutenant Governor of British Columbia Awards in Architecture recognizes excellence in completed architectural projects led or designed by AIBC members. Four projects received the Lieutenant Governor of British Columbia Award in Architecture — Medal: • Nanaimo Airport by the office of mcfarlane biggar architects & designers inc. in association with Checkwitch Poiron Architects Inc. • Full House by Leckie Studio Architecture +
Design Inc. and Gaile Guevara Studio Ltd. Planning Inc., in association with Bjarke Ingels Group (BIG), and James K.M. Cheng Architects (advising architect).
Nanaimo Airport Pearl Block
• Upper Skeena Recreation Centre by John
Hemsworth Architecture Inc.
Seven projects received a Design Excellence Award: • Nanaimo Airport by the office of mcfarlane biggar architects & designers inc. in association with Checkwitch Poiron Architects Inc. • Full House by Leckie Studio Architecture +
Design Inc. and Gaile Guevara Studio Ltd.
• Vancouver House by DIALOG BC
Architecture Engineering Interior Design
Planning Inc., in association with Bjarke
Ingels Group (BIG), and James K.M. Cheng
Architects (advising architect). • The Shipyards by DIALOG BC Architecture
Engineering Interior Design Planning Inc.
• Clayton Water Reservoir by Local Practice
Architecture + Design Ltd. • Pearl Block by D’Arcy Jones Architects.
• Upper Skeena Recreation Centre by John
Hemsworth Architecture Inc.
The Emerging Firm Award went to Stark Architecture Ltd. The Innovation Award went to 1 Lonsdale by John Hemsworth Architecture Inc. and the Unbuilt Award was given for Prototype Infill Station by Perkins + Will Canada Architects Co.
Three Equity Awards went to Tsawwassen First Nation Youth Centre by Mackin Architects Ltd.; Rick Hansen Foundation Accessibility Certification Cost Comparison Feasibility Study by hcma architecture + design; and NƏC’AMAT CT Strathcona Library / YWCA Cause We Care House by DIALOG BC Architecture Engineering Interior Design Planning Inc.
Three Special Jury Awards went to: Gastown Child Care Centre by Acton Ostry Architects, SoLo by Perkins + Will and Shift House by Measured Architecture Inc.
ROAD BUILDERS RESPOND TO FLOODING The BC Road Builder & Heavy Construction members are working tirelessly to assist the provincial and local governments to safely re-open transportation corridors for communities impacted by the re-cent storm and flooding.
Highway maintenance and heavy construction members from across the province have stepped up, notifying the province and local government and emergency services with equipment and operators ready and willing to assist in any way necessary. Public safety is the top priority at this time.
The association said that roadways have to be not only cleared, but safe for use. Experts from the Ministry of Transportation and Infrastructure are actively assessing the scope of the damage, and members are ready to get transportation corridors and infrastructure working and open for public use again.
“If anyone had any doubts about the challenges of climate change, the extreme weather and wildfire events of 2021 have certainly demonstrated the seriousness of the challenge that lies ahead, especially for our highway maintenance members,” said association chair Paul Simpson.
Highways, bridges and roads are vital to communities across the province, connecting British Columbians to each other, facilitating the delivery of essential goods and services, and connecting the province to the rest of Canada.
The association said members are dedicated to ensuring safe transportation infrastructure in the province is maintained and restored after the effects of the storm, and standing ready to help in any way possible.
SUPPLY CHAIN RECOVERY GROUP FORMED The federal and B.C. governments announced the creation of a joint Federal Provincial Supply Chain Recovery Working Group to restore the flow of goods through the province after devastating flooding in November 2021.
Those invited to participate in the Federal / Provincial Supply Chain Recovery Working Group include several Government of Canada departments, Government of British Columbia ministries, the Vancouver Fraser Port Authority, the Vancouver International Airport Authority, the BC Marine Terminal Operators Association, the BC Trucking Association, the Retail Council of Canada, the Canadian Fuels Association, representatives from British Columbia’s tow boat industry, the Gateway Council of BC, the BC Chamber of Shipping, CN Rail, and CP Rail, among others.
This Working Group is a first step in what will be an ongoing effort by all orders of government to en-sure that the supply chain is re-established in a way that gets Canadians the goods they need and help mitigate against future incidents.
The Working Group is developing options for contingency transport and logistics for essential goods and materials. As infrastructure gradually reopens, the Working Group will prioritize and advise on the best routes and use of limited capacity for the movement of goods across all transportation modes, while balancing community needs and national economic interest. Furthermore, together they will consider options for diverting traffic or establishing new logistics chains in the province.
MINORU CENTRE WINS INTERNATIONAL PRIZE The Minoru Centre for Active Living in Richmond has received the 2021 Architecture Prize for Accessibility from the International Olympic Committee, International Paralympic Committee, and International Association for Sports and Leisure Facilities.
The annual Distinction for Accessibility Award aims to increase the accessibility of all sports and lei-sure facilities and architectural structures worldwide so that everyone has an opportunity to practice and view sport freely and without barriers.
The city’s new state-of-the-art fitness and aquatic facility, which opened in 2020, received the honour for its integration of accessibility features such as: • Design features in the aquatic centre to enable easy and dignified access to the various pools such as ramps and gentle steps as well as infinity edges and mobile lifts. • Multiple drop-off areas to facilitate accessible transportation modes. • Barrier-free front doors and accessible reception centres. • Change room facilities that significantly exceed width requirements. For example, oversize shower and changing stalls to accommodate a family with young children or individuals using an assistive device.
Designed by HCMA, the Minoru Centre facility boasts a spacious 790 square metre (8,500 sq. ft.) fitness centre with a full complement of cardio, strength and stretching equipment as well as a large 176 square metre (1,900 sq. ft.) fitness studio that hosts a variety of group fitness classes.
FIRST NATIONS DEVELOPMENT PLANNED FOR BURNABY A new proposed master plan for the redevelopment of the Willingdon Lands in Burnaby will see the creation of a mixed-use, contemporary Musqueam and Tsleil-Waututh urban village. It will provide approximately 5,000 housing units and include a film studio and a childcare centre.
The master plan was unveiled by Musqueam Indian Band, Tsleil-Waututh Nation and Aquilini Development.
The site’s design will incorporate a number of elements inspired by the nations’ history, culture, and connection to the lands and waters such as entry portals, artwork, native plants, a medicine garden, and wayfinding signage in hən ̓ q ̓ əmin ̓ əm ̓ and English. At the heart of the development will be a Musqueam and Tsleil-Waututh cultural centre and an outdoor hearth that will serve as a gathering place for both the nations and the wider community.
Located on the southwest corner of Willingdon Avenue and Canada Way, the Willingdon Lands lie on the shared territory of the Musqueam and Tsleil-Waututh nations. In 2014, the Musqueam and Tsleil-Waututh nations along with Aquilini Development purchased the lands from the provincial government.
SKILLS CANADA NATIONALS 2022 SET FOR VANCOUVER Canada’s most talented post-secondary students and apprentices will compete at the 2022 Skills Canada National Competition (SCNC) in Vancouver in May.
Scheduled for the Vancouver Convention Centre, SCNC is the only national, multi-trade and technology competition for students and apprentices in the country. More than 300 competitors from all regions of Canada will participate in 37 skilled trade and technology competitions from May 26-27.
