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VOL. 27 NO. 3

editor’snote Status quo for Gen Y and the New Millennials is embedded in technological norms and widely held attitudes that were marginal to non-existent when Gen X and the Boomers were coming of age. In general, it’s seen as a sign of progress that the mainstream has caught up with what were once considered innovative practices and unconventional views. Nevertheless, the vanguard of that change sometimes looks back at the past a little wistfully.

That includes early practitioners of green building design who were asked to reflect on their experiences at the Green Real Estate conference in Toronto earlier this spring. As with most movements, some of its originators perceive that its purism has eroded in the transfer from the few to the many.

“What we were doing 15 years ago was really exciting design and it was cool, and the rest of the industry wasn’t doing very much at all,” recalled Mark Lucuik, Director of Sustainability with Morrison Hershfield Consulting Engineers. “The green pie has got bigger, but it is less green.”

That said, he pointed to many positive advancements in his area of expertise in building materials and the building envelope. Notably, materials, coatings and furnishings now contain markedly fewer volatile organic compounds (VOCs).

“Fifteen years ago it wasn’t even on the radar,” Lucuik said. “That’s one thing that has changed a lot in the industry: all the materials have gotten better. LEED can probably take a lot of credit for that.”

Our Construction/Renovation feature delves further into the theme of reducing the environmental impact of building materials and components, highlighting a CSA guideline and standard for sustainable construction practices. Federal, provincial and municipal lawmakers will no doubt be interested in the newly released CSA Z783 standard for deconstruction, which sets out procedures for recovering materials and minimizing waste that could be conveniently referenced in regulations, codes or by-laws.

From the end of the building cycle, we turn to the end of the work cycle with Human Resources features exploring termination, resignation and retirement. In particular, service providers to the real estate industry may want to take a closer look at Quebec’s proposed voluntary retirement savings plan (VRSP) program, which, despite the name, would have some compulsory requirements for designated employers.

The federal government is also attempting to give Canadians another mechanism to save for retirement with the recent introduction of Bill C-25, the Pooled Registered Pension Plans Act. However, under Canada’s constitutional division of responsibilities, it will be up to the provincial governments to enact similar legislation before such pooled plans could be widely available.

Quebec is leading on that front, while Ontario’s 2012 Budget expressed some reservations about the concept. Then again, other initiatives would seem to indicate that provincial government prefers for its constituents to hand their money over to the Ontario Lottery and Gaming Corporation.

C a n a d a’ s P r e m i e r m a g a z i n e f o r B u i l d i n g o w n e r s a n d m a n a g e r s

Barbara Carss barbc@mediaedge.ca

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4 May 2012 | Canadian Property Management

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contents

Focus: Human Resources 17 Workplace Retirement Savings Plans: Both the Canadian and Quebec government are exploring ways to capture employees not currently enrolled in company-sponsored programs.

20 Just Cause Termination: Employers generally carry burden of proof when they dismiss workers without notice or severance pay.

24 Managing Emotional Resignations: Employers should clarify intent, extend the opportunity to resolve conflict and ask for written confirmation before concluding the employee is departing.

Articles: 8 Reducing Construction/Demolition Waste: CSA standards address the design and deconstruction stages to find ways to reuse, recycle and recover building materials, while ultimately rethinking the process.

12 Fitness Centre Risk Management: Operators should consider facility access, training equipment and on-site personnel.

14 BOMA BESt Update: Highlights from the 2011 report on 415 newly certified buildings achieving Level 2 to 4 status.

28 Carpet Encapsulation: Quick-dry cleaning process gains new prominence due to improved product formulation.

30 Contractor Management: Automated systems help monitor regulatory compliance.

Departments 4 Editor’s note

6 May 2012 | Canadian Property Management

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constructionrenovation

Diversion Tactics

New Standard Formalizes Steps to Reduce Construction/Demolition Waste

By Barbara Carss

constructionrenovation

Sustainability is alternately framed as a challenge and a mission in two ambitious initiatives with a 2030 target date. It also poses something of a paradox since the programs are philosophically compatible yet could practically conflict.

Design and building professionals are taking up the 2030 Challenge, which Architecture Canada has endorsed, to dramatically reduce the global warming potential of new and renovated buildings. This has green building specialists eyeing aging, underperforming industrial/commercial/ institutional and multi-residential stock.

“The future of sustainable design is going to be about reimagining existing buildings,” Vivian Manasc, President of Edmonton-based Manasc Isaac Architects Ltd., told seminar attendees at the Green Real Estate conference in Toronto earlier this spring. “We will actually be seeing a large makeover of the existing environment.”

Meanwhile, a coalition of business, environmental, public sector and community interests that comprise the Construction Resource Initiatives Council is spearheading Mission 2030 to halt the disposal of construction, renovation and demolition waste into landfill. Sustainability specialists focused on the final stages of the building life cycle hope the term “deconstruction” will come to replace “demolition.”

“We’re trying to shift our language.

More importantly, it’s not just the shift in language, it’s the shift in thinking,” reflects Vince Catalli, Vice Chair of the CSA Group’s Technical Committee on Sustainable Construction Practices, and Business Development Manager with

the environmental consulting firm, Golder Associates.

Two CSA standards now address this task, with the aim of reducing waste from a building’s conception to demise. The newly released CSA Z783-12, Deconstruction of buildings and their related parts, reinforces and formalizes procedures to recover materials and minimize discards. It’s a follow-up companion to CSA Z78206, Guideline for design for disassembly and adaptability in bu i l d i n g s , w h i c h u rg e s ow n e r s , developers, architects and engineers to consider how a building might be modified or dismantled in the future and to make design, component and material choices to ease those opportunities.

“You can think of Z782 as a guidance document for people sitting at a drafting table contemplating design of a new building, while Z783 is the standard that’s carried around the worksite while a building is being taken down,” explains Dwayne Torrey, the Project Manager with CSA Group who coordinated the development of the new standard.

CONSISTENT PARAMETERS Initially, at least, CSA Z783 is most likely to be used in projects that weren’t designed in accordance with CSA Z782 principles. It sets out an organized process for identifying, saving and sorting non-hazardous recoverable materials, and outlines a consistent best-practices approach that owners can specify when they call for tenders.

For owners, specifying the standard should eliminate a variable and allow them to more accurately weigh competing bids. For contractors, it should ensure that they are competing eve n l y, b a s e d o n t h e p l e d g e o f comparable services. Beyond that, it might even provide insight to give savvy adopters a business edge.

“When they bid these contracts, the difference between high and low bids could be in how resourceful they can be reclaiming, reusing and recycling the materials. That’s where the competitiveness lies,” Catalli says.

The standard also provides credible guidance for on-site supervisors and workers. “For project managers, CSA Z783 essentially could be a key document in a deconstruction project,

“The CSA standard is a very, very important step in helping the regulatory bodies realize that there are tools they can use.”

Canadian Property Management | May 2012 9

constructionrenovation providing not only necessary requirements, but also a checklist of all the things they are going to have to be dealing with,” Torrey suggests.

Proponents are promoting both standards as effective mechanisms that could be referenced in building codes, other federal or provincial regulations, municipal by-laws and voluntary certification programs.

Some fairly obvious applications for CSA Z783 might include as a requirement for obtaining municipal demolition permits, achieving p r ov i n c i a l wa s t e d ive r s i o n a n d recycling targets or securing credits in LEED programs.

“The building industry is ready for this. The CSA standard is a very, very important step in helping the regulatory bodies realize that there are tools they c a n u s e ,” s a y s R e n é e G r a t t o n , President of the Construction Resource Initiatives (CRI) Council and a m e m b e r o f t h e C S A Te c h n i c a l Committee on Sustainable Construction Practices. “We needed to have a standard or something official

to open the dialogue on the importance and urgency to improve on building industry practices.”

The CRI Council’s model has more elements than the conventionally known 3Rs in an effort to further diminish the final tier of remnants that ends up in landfill or hazardous waste facilities. It adds “Rethink” a n d “ R e c ove r ” a n d i n c l u d e s a n energy-from-waste option – something that CSA Z783 also covers, with information on the potential thermal value of carpet, for example.

“That’s kind of the last alternative,” Catalli stresses. “There is a hierarchy to it. If you can recover for reuse, that is the best option. Recycling is the next in line. Energy-from-waste is third and, as a last resort, there is a landfill.”

FRONT-END CONSIDERATIONS Typical ICI refurbishment and renovation projects offer more opportunities at the preferred end of the scale. Reworking interior features and configurations, or

even gutting the entire space, is almost always simpler than replacing or dismantling the structural framework and systems. In future, if CSA Z782 design principles become more common, Catalli predicts it should become easier still.

“Interiors are a layer of the building that can accommodate disassembly quite nicely,” he observes. “There are cases where the materials we disassemble can be reused on site.”

However, despite increased adoption of the integrated design philosophy and general acknowledgement of its record for producing efficient operating systems and finding capital savings, demolition/deconstruction is still largely separated out from design functions. Catalli contends that there should be plenty of time to develop creative reuse and recycling strategies during the design phase of most renovation and redevelopment projects.

“Usually demolition comes up in conversation about a month before they are ready to tender so they’ve wasted about a year when they could have been thinking about it. There is a lot of time when the design activity is taking place when there could also be a team in place to do a better job on the deconstruction side,” he says.

It’s perhaps an even greater leap to envision a building’s deconstruction in sync with its design, which may be one of the obstacles that CSA Z782 has faced. It has not been prominent in the six years since its release, but advocates are optimistic it can garner more attention as a package with CSA Z783.

“Z782 should address the ‘reduce’ component of the 3Rs. If you look at the way buildings are built now, we’re not there yet, but you can’t just regulate it all at the tail end. It has to start at the front end in the design phase,” Gratton asserts. “The first Rs have to be the focus now.” zz

For more information about the CSA standards for sustainable construction practices, see www.csagroup.org. For more information about the Construction Resource Initiatives Council and Mission 2030, see www.cricouncil.com. For more information about the 2030 Challenge, see www.sustainability2030.com.

10 May 2012 | Canadian Property Management Untitled-7 1

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amenities

Exercise Diligence Risk Management Critical for Fitness Facilities

By Kendy Bentley

12 May 2012 | Canadian Property Management

Exercise can be a positive force in the workplace to support health, productivity and stress management.

Likewise, on-site fitness centres can be an amenity that helps to draw and retain tenants, but building owners and managers should be diligent in addressing the risk that such facilities pose. It’s not a simple matter of installing some treadmills and bikes in vacant, unsupervised space.

Exercise related injuries are not uncommon. Providers of facilities must understand their exposure to risk and carefully consider design and management of the fitness space. Many owners/mangers will choose to outsource the set up and operations of fitness centres to a specialized contractor.

Appropriate equipment selection, vigilant maintenance, cleanliness and safety are critical. On the administrative side, effective scheduling and creative programming are key to customer satisfaction. Qualified

personnel, in tune with the needs and abilities of a range of users, are essential.

Facility operations, equipment and personnel represent three major sources of risk.

OPERATIONS & administration Signage posted at the facility entrance should clearly state who is allowed access, how to become a member/user and whether the facility is supervised. Ensure controlled access so only registered users can use the facility.

Once inside, users should be required to attend instructional orientation sessions on proper equipment use, disinfecting after use, guidelines for personal physical activity programs and facility emergency procedures.

Signage should communicate emergency procedures and proper equipment usage.

Install emergency call systems in exercise areas and locker rooms (buttons, intercom, phones, etc.) and/or video surveillance in exercise areas. Provide added security in

amenities locker rooms via a mechanical keypad with different codes for men’s and women’s rooms. Women, especially, can feel vulnerable at non-peak times.

Install easily accessible First Aid and Automated External Defibrillator (AED) kits.

Develop a written emergency plan and test it.

Perform regular safety and cleaning audits and record them.

Provide forms for informed consent and waiver of liability for all users to read and sign. Risks of activity must be documented and users advised to seek clearance from their health care provider. This waiver must be signed and witnessed. Many facilities use a standard pre-screening form called PAR-Q or Physical Activity Readiness Questionnaire.

Provide access to drinking water. Install non-slip floors or appropriate matting in shower areas.

HVAC is important. There should be proper balance of air circulation and temperature (19 to 22° C) and sufficient air changes in locker and shower areas so users don’t get overheated.

EQUIPMENT Selection of equipment suitable for the facility design and the users is imperative.

Regular maintenance will identify potential problems so that damaged equipment can be repaired or replaced. Proper documentation of both inspection and repair is critical to risk management.

Select only commercial grade equipment and avoid used equipment. Implement a preventative maintenance program and checklist, which includes keeping detailed

maintenance records for all equipment.

Records will be key to defending against claims that an injury is due to malfunctioning equipment.

Develop a system to inform users of broken equipment so injuries are prevented. This can be an “out of order” sign to hang on equipment.

Properly install equipment according to manufacturer’s instructions. For example, a common error is the placement of a treadmill too close to a wall or other equipment when a five-foot clearance is required. Putting a mat on the wall to soften the impact is not the answer!

Contracted equipment maintenance firms should have WCB and adequate, current insurance and follow all specified safety procedures. Consider requiring the contractor to provide a certificate of insurance naming the facility as an “additional insured”. A minimum of $2 million comprehensive general liability insurance policy is suggested, while $5 million is the standard.

Pay attention to those with disabilities. For example, provide wheelchair accessible space between equipment.

PERSONNEL Staff or contractors, such as personal trainers and group class instructors, should be properly certified, insured and competent and knowledgeable in their field of instruction. Trainers should also have current CPR, AED and First Aid training and a good insurance policy.

There are several certifying organizations in Canada that proclaim they are leaders in

education and certification. However, since there is no licensing body, anyone can call himself or herself a personal trainer. Some trainers are certified through weekend workshops.

In contrast, the Canadian Society of Exercise Physiology (CSEP) is a reputable nationally recognized body that confers the Certified Personal Trainer (CPT) and Certified Exercise Professional (CEP) designations.

The CSEP CEP is required to have a university degree in exercise science or related area and 300 hours of related experience just to qualify for the training and exam. A CSEP CPT is certified to work with healthy people and must have a two-year college diploma or university credits in six core competency areas. Ideally, on-site staff should hold one of these credentials.

Stories abound of overzealous and/or inadequately qualified trainers who may push clients beyond their physical limits or venture into advice on nutrition and supplements sales that may cause harm.

Allowing tenants to bring their own trainers on-site may expose building owners/managers to that risk. zz Kendy Bentley, BScN, RN, is President of KBA Group, specializing in the design and management of corporate fitness centres and organizational wellness strategies and programs.

For more information, see the web site at www.kbagroup.ca.

Canadian Property Management | May 2012 13

operatingefficiencies

BOMA BESt Inductees Pick Up the Pace Energy Performance Improves in 2011 Sample

NRCan’s national average. Office buildings that have higher overall BOMA BESt scores tend to also have better energy performance than those that have overall lower scores.

BOMA BESt carbon intensities show regional variations, with highest carbon intensities in Atlantic and Central Canada and the lowest in Quebec and British Columbia.

A snapshot of the 415 buildings that achieved at least BOMA BESt Level 2 status in 2011 reveals energy intensity levels that are better than both the presumed national average and the average for previously certified BOMA BESt buildings. Water consumption data for 2011 also shows more efficient use, overall, for last year’s program inductees versus the buildings analyzed in the BOMA BESt Energy and Environment Report (BBEER) periods for 2010 and 2009.

The following key findings from BBEER 2011 summarize performance data gathered from January 1 to December 31, 2011 for 336 office buildings, 46 light industrial buildings, 24 enclosed shopping centres and nine open-air retail projects. It categorizes the results by quartile, provides context for the findings and points to opportunities for further improvement – Editor.

Half of the 336 surveyed office buildings were constructed between 1960 and 1989. Nearly three-quarters are small or mid-sized buildings comprising less than 250,000 square feet, while larger buildings in excess of 500,000 square feet made up 11% of buildings that received BOMA BESt certification Levels 2 through 4 in 2011.

BOMA BESt office buildings tend to perform better in terms of energy intensity 14 May 2012 | Canadian Property Management

(i.e. the amount of energy consumed per square foot) than the national average of 36.65 ekWh/ft2/yr, identified in the Natural Resources Canada’s (NRCan) Office of Energy Efficiency, Comprehensive Energy Use Database, 1990 to 2009. The average for BOMA BESt certified buildings is 30.8 ekWh/ft2/yr.

When grouped regionally, BOMA BESt office buildings in all regions show average annual energy intensities better than

DATA CENTRE LOADS DISTORT AVERAGE The majority of BOMA BESt office buildings (66%) certified in 2011 have energy intensities that are better than the BOMA BESt average. The overall BOMA BESt average is being negatively impacted by a few buildings that have large additional loads such as data centres. This suggests the need for a more detailed classification of buildings that have applications such as data centres, which is now being addressed in BOMA BESt version 2.

By ordering all the BOMA BESt certified offices according to their energy intensity and dividing the samples into four groups, the following benchmarks are obtained: • Top performing 25% of buildings: 10-21 ekWh/ft2/yr • Upper middle 50-75% of buildings: 22-26 ekWh/ft2/yr • Lower middle 25-50% of buildings: 27-34 ekWh/ft2/yr • Lowest performing 25% of buildings: 35-92 ekWh/ft2/yr Average energy consumption in 2011 at 30.8 ekWh/ft2/yr is better than it was in 2008 (31.52 ekWh/ft2/yr). However, the current rate of improvement signals that significant effort on the part of industry is still required if ambitious targets such as the 20 x ‘15 target, which aims to achieve 20 ekWh/ft2/yr of total energy use in office buildings by 2015, are to be met.

There appears to be some correlation between office building size and energy intensity. The smaller buildings – those less than 100,000 ft2 – average 27.7 ekWh/ft2/yr

operatingefficiencies or about 18% less than medium to large buildings (250,000–500,000 ft 2), which average 33.9 ekWh/ft2.

On the other hand, very large buildings – buildings greater than 500,000 ft2 – also use less energy (29.1 ekWh/ft2) than medium-large buildings. A possible explanation could be that the largest buildings have dedicated energy management teams to ensure optimal performance.

GAPS REVEAL ROOM FOR IMPROVEMENT There is a significant range between the energy consumption of the best performing office buildings and that of the worst performing offices. The median for energy per- square-foot in the best performing quartile is 17.75 ekWh. The median for energy per-square-foot in the worst performing quartile is 38.35 ekWh. This represents a large standard deviation.

The total carbon dioxide from all of the office buildings, representing 82.2 million square feet of office space certified to Levels 2 to 4, is 560,814 metric tonnes. If these buildings were performing at the national average, they would be emitting 667,332 metric tonnes. The difference is 106,518 metric tonnes, which is equivalent to 20,886 cars not driven for one year or 22,712 acres of pine forest storing carbon dioxide for one year.

By ordering all the BOMA BESt certified office buildings into quartiles according to their water consumption (measured in m3 water per m2 of area), the following benchmarks are obtained: • Top performing 25% of buildings: 0 – 0.2 m3/m2 • Upper middle 50-75% of buildings: 0.21 – 0.54 m3/m2 • Lower middle 25-50% of buildings 0.55 – 0.97 m3/m2 • Lowest performing 25% of buildings 0.988.85 m3/m2 These performance ranges suggest that over half of the buildings have significant room to improve their water consumption.

The results for 2011 show that office buildings less than 500,000 ft2 in size use less water per square foot than buildings that are 500,000 ft2 or more in size. This may be due to the presence of food courts, cooling towers, water cooled HVAC systems or other special uses in larger buildings. Also, newer office buildings tend to use less water per square foot, perhaps due to newer, more efficient water fixtures.

WASTE & POLLUTANTS About 42% of office buildings in the sample size of 336 buildings divert between 60 and

90% of their waste from landfill.

However, many office buildings (23%) have not reported their exact diversion rate. Results indicate that there is a higher incidence of better waste management practices in buildings constructed after 1990.

There is a strong culture and management infrastructure to support environmental management in the industry. Policies and protocols are well established for managing

pollutants such as emissions from boilers, and hazardous materials such as those found in cleaning products, lubricants, water treatment chemicals, fuels and pesticides.

While there are well-established refrigerant management practices such as properly maintaining inventory of ozonedepleting refrigerants and providing training to staff, there is still room for refrigerant replacement, particularly in office buildings built prior to 1960. Almost

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operatingefficiencies all office buildings use certified contractors to global-warming refrigerants do have do refrigerant maintenance. recovery systems for use during system 70% of office buildings in the top-scoring servicing, repairs or disposal, the quartile use only refrigerants with low ozone- majority (71%) of buildings in the very depleting potential. However, results indicate lowest quartile lack refrigerant leak that the vast majority of office buildings still detectors. have room to improve.

Fewer than 40% of buildings have Many still use refrigerants with high low nitrogen oxide (NOx) boilers. ozone-depleting and global-warming However, about two-thirds of buildings potential although most reportedly have a do have a regular documented schedule CARMA_CondoBusiness_01-19-2009_CS2--F.pdf 2/3/09 5:41:35 PM phase-out plan.

Although three quarters of for cleaning burners, monitoring buildings that use ozone-depleting, controls and analyzing flue gas.

AMBIENCE & EDUCATION The majority of office buildings score very well in terms of indoor environment, which includes air quality, lighting and acoustic privacy. The average indoor environment score achieved by office buildings is 88.5%.

Almost all (99%) of the office buildings in this sample size of 336 h av e d o c u m e n t e d e nv i r o n m e n t a l policies and communications strategies with tenants to explain the environmental practices being implemented in the building, and to encourage tenants to support such initiatives.

OTHER BUILDING TYPES In 2011, 46 light industrial buildings were certified to BOMA BESt Levels 2 through 4, representing the second largest category in the program. The majority (86%) of light industrial buildings covered in this report are smaller than 100,000 ft2 in size.

24 enclosed shopping centres were certified to BOMA BESt Levels 2 through 4. The majority (67%) were 250,000 to 750,000 ft2 in size. Only nine retail plazas received BOMA BESt certification at Levels 2 through 4 in 2011. The majority (78%) of these buildings were smaller than 250,000 ft2 in size.

BOMA BESt certified enclosed shopping centres tend to perform better in terms of energy intensity than the typical annual energy intensity of 30.98 ekWh/ft2 (1.2 GJ/ m2) identified by NRCan. BOMA BEStcertified enclosed shopping centres have an average energy intensity of 23.40 ekWh/ft2 (0.90 GJ/m2).

Initially, open air retail buildings were only reporting energy consumption in common areas. As this does not provide sufficient basis for benchmarking, the updated BOMA BESt Version 2 now requires full energy consumption to be reported, including the tenants’ data. While recognizing the initial difficulty in obtaining a full data set, this requirement may lead to better cooperation, understanding and dialogue between tenant and landlord with regards to the joint objective of reducing energy use.

Light Industrial buildings certified to BOMA BESt Levels 2 to 4 consist primarily of warehouses. They tend to perform better in terms of energy intensity (15.97 ekWh/ft2/yr) than the typical annual energy intensity identified by NRCan for the transportation and warehousing sector (35.9 ekWh/ft2). zz The complete text of the BOMA BESt Energy and Environmental Report, 2011 can be found at www.bomabest.com.

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humanresources

Employers Enlisted to Prompt Workers’ Savings Real Estate Well Positioned in Investment Mix

By Barbara Carss Efforts to spur Canadians to save for retirement may also deliver a new pool of capital for real estate investment. Recently proposed schemes to capture workers not formally enrolled in company pension or group retirement savings plans would presumably also generate more opportunity for various asset classes.

“There should be some uptick of funds looking to real estate. Certainly, Australia’s mandatory superannuation is one reason why its LPTs are world travellers,” observes Michael Brooks, a Partner and Real Estate Practice Group Leader with Aird & Berlis LLP. Notably, the government of Quebec’s prescription for voluntary retirement savings plans (VRSPs) comes with mandatory requirements for employers. As of early May, affected parties are waiting for draft legislation to flesh out statements in this spring’s provincial budget, which targeted January 1, 2013 for the rollout of the program.

As proposed, employers will have until January 1, 2015 to offer VRSPs in designated workplaces – i.e. those with at least five employees who have one year of uninterrupted service, and where no pension/group retirement savings plan currently exists. Employer contributions to VRSPs will not be compulsory, but they will have to choose a fund administrator, implement the process for enrolling their workers, calculate and withhold salary-based contributions for all who opt to participate, and remit that money to the VRSP administrator.

“The result is a pool of money,” explains Daniel Hayhurst, a Partner who heads up the pension department at Gowling Lafleur Henderson LLP. “It’s not going to be a single employer’s plan. There will be a large number of employers enrolling many people into larger plans.”

The discussion paper released on March 20th in conjunction with the Quebec budget envisions potential participation of nearly two million workers, or approximately 50%

of the provincial labour force, who are not currently part of a company-sponsored plan. This includes about 950,000 prospective enrollees from the designated business sector, whose contributions will be deducted from their pay by default unless they officially withdraw from the VRSP program. Up to one million other self-employed workers or personnel in companies with fewer than five employees would also be eligible to opt in.

Meanwhile, the Canadian government is attempting to encourage a similar retirement savings instrument, known as pooled registered pension plans (PRPPs).

Bill C-25, the Pooled Registered Pension Plans Act, introduced in November 2011, would apply only in federally regulated workplaces, but also provides a framework that other provincial governments could adopt.

automatically enrolled in a VRSP by their employers and will then have 60 days to formally withdraw. After that period, they would be deemed automatic contributors at an established rate, which the discussion paper pegs at 4% in January 2017 after yearly phased increases from the 2% launch rate in 2015. Employers will also have the option of contributing to their employees’ VRSPs and will receive applicable federal and provincial tax deductions for doing so.

As with any other registered retirement savings plan, contributors will be able to withdraw funds at any time, but will be subject to provincial and federal tax on the amount withdrawn. They’ll also have some flexibility to revise their contribution rate, temporarily

AUTOMATIC ENROLLMENT, SCOPED OPTIONS “In concept, it’s the same product, but, assuming it becomes law as proposed, we will see a different outcome in Quebec than we may see in other jurisdictions because it will be mandatory for employers to offer it,” Hayhurst says.

All eligible workers will be

Canadian Property Management | May 2012 17

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“There would be a lot of money going into a particular plan over a course of time.” halt contributions, or choose from a small range of alternatives to the default VRSP. Only entities licensed by Quebec’s Autorité des marchés financiers will be able to administer VRSPs, which are essentially the same financial institutions and investment fund managers already overseeing other existing retirement savings plans. The discussion paper indicates that they will be expected to keep management fees in line with those charged for institutional pension plans of comparable size.

The funds, themselves, are to be life-cycle or target-date funds, which reduce exposure to risk as the contributor ages. This would be the default option, or the fund to which contributions would be automatically remitted unless the participant instructs otherwise. However, the discussion paper proposes that VRSP administrators should offer up to five other investment options from which contributors may choose.

“In terms of the financial institutions that will be offering these products, they are struggling with it because they don’t have the draft legislation yet to give them direction, and January 1 of next year is really soon,” Hayhurst notes. “They are going to be competing against themselves in some respects. Any of them that have a large proportion of the marketplace will not be thrilled with this concept, but some of the smaller players may see it as an opportunity to get in.”

RISK REDUCING TRAJECTORY Many Quebec-based corporate owners and managers of real estate will not be affected by the pending legislation since they typically already provide pension or group retirement savings plans for their employees, but many contractors who provide services to the real estate industry will likely be required to establish VRSPs.

Cleaning and security personnel, for example, rarely have such work-related benefits.

“With the mandated aspect of it, it will increase retirement savings overall in the province,” Hayhurst predicts. “There would be a lot of money going into a particular plan over a course of time.”

Census 2011 results reveal that Quebec’s population is one of the oldest among Canadian provinces – a fact that could work in real estate’s favour in a life-cycle fund designed to reduce risk as contributors get closer to retirement. The asset class has already attracted more institutional investment during recent volatile times.

“Most pension funds and life insurance companies have increased their allocation to real estate,” reports Bill Argeropoulos, Vice President and Director of Research with Avison Young (Canada) Inc. “Over the past decade, they have gradually increased their allocation from 5 to 7% to as much as 12 to 13% and reduced their exposure to equities.” zz For more information about Quebec’s proposal for voluntary retirement savings plans, see http://www. budget.finances.gouv.qc.ca/Budget/2012-2013/ en/documents/retirement.pdf. For more information about Bill C-25, the Pooled Registered Pensions Plans Act, see http://news.gc.ca/web/article-eng. do?nid=638359.

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humanresources

Just Cause, Soft Concept

20 May 2012 | Canadian Property Management

Room for Interpretation in Defining Misconduct

By Suzanne Kleinberg and Michael Kreimeh Just cause is a legal term that means an employer is justified in terminating an employee without providing termination notice or termination pay. There is no clear-cut method of determining what will constitute just cause. Each case is unique and must be reviewed with attention to all of the facts of the situation.

When resolving whether there is just cause for dismissal without notice, Courts will look at answering the following two questions: 1) was misconduct by the employee proven? and 2) was the level of the misconduct justifiable to dismiss the employee without any notice?

If the answer to both question is: yes, then just cause dismissal is reasonable.

However, if an answer to either question is: no, then the employer is obligated to give reasonable termination notice or termination pay. A number of factors contribute to the determination.

Firstly, a Court will look at whether the employee’s misconduct caused an irreparable disruption in the employment relationship by either violating an important condition of the employment contract or destroying the employer’s trust in the employee. If the misconduct resulted in either of these outcomes, there is just cause.

Secondly, a Court will consider the seniority of the employee in the organization. The more senior the employee, the more serious the conduct.

Thirdly, a Court will examine whether the employer gave warnings (written or verbal) prior to termination. Where there was no warning prior to the dismissal that the misconduct was connected to, except in the most serious cases (e.g. stealing, violence, leaking corporate secrets etc.), it will be more difficult for the employer to prove just cause.

humanresources

Lastly, Courts will look at whether the employee’s misconduct was tolerated prior to the dismissal. If misconduct occurred and the employer tolerated this behaviour through inaction – i.e. not providing the employee with a formal warning that misconduct would not be tolerated – then the employer’s actions will be under scrutiny if the employee was dismissed without notice.

Not every act of misconduct should lead to termination. It must be serious enough to end the employment relationship. The types of conduct that the law recognizes as justifying termination have included: incompetence; insubordination or disobedience; abusive language or behaviour; violence; chronic absenteeism; persistent lateness; intoxication; dishonesty; theft; destruction of property; and sexual harassment. When there is a cause for termination, the employer has no obligation to provide the employee with notice or termination pay.

Dishonesty This is not only theft or fraud, but any form of untrustworthy behaviour. This includes conduct previous to the start of employment (e.g. untruthful representations in a resume), during the course of employment, or in relation to matters unconnected with employment. In determining when just cause for dishonesty exists, the Courts are primarily concerned with whether the conduct of the employee is such that she or he can no longer be trusted or depended upon by the employer.

Misrepresentation at time of hiring occurs when an employee is hired on the basis of a skill, experience or educational achievement that he or she professed to possess, but in reality does not. The employee is such a case may be dismissed with just cause for misrepresenting the skill.

Breach of Trust This occurs when someone in a position of confidence violates the trust invested by someone else. In an employment situation, it typically occurs where the employee demonstrates misconduct that promotes his/ her own interests instead of the employer’s interests. Where the employee’s misconduct was motivated by a conflict of interest, the natural trust placed in the employee will have been destroyed. However, attention needs to be paid to the specific facts to confirm is a breach of trust has occurred.

doctor’s note where the employee has been absent on a significant number of days.

An employer would, in most cases, be required to formally warn an employee before proceeding with outright dismissal under the grounds of absenteeism. The employer could not justify firing an employee who was late on only one occasion. However, chronic lateness and absenteeism may justify dismissal if the employee had been given sufficient warnings and still failed to correct this behaviour without valid reasons.

Insubordination If an employee refuses to acknowledge and accept the authority of the employer and refuses to comply with the employer’s clear instructions, policies and procedures without reasonable justification, it may be considered insubordination. Usually, the Courts will not allow an employer to fire an employee for a single incident of insubordination, unless it was of major significance.

Incompetence An employee is obligated to display a reasonable level of competence in relation to the job for which he or she is hired. Where it is clear that the individual demonstrates that he or she is not up to the task or has misrepresented his/her qualifications and/or ability, the employer may have cause for termination.

Employers are obligated to advise employees if there are performance related concerns and provide a private opportunity to address them. Courts have repeatedly indicated that the mere expression of disappointment with an employee’s work is not sufficient.

The employee must be aware of the expected standard of performance and notified that she/he has failed to meet that standard. An employee must be given a reasonable amount of time to improve performance and be warned that failure to do so could result in termination. Courts have indicated that criticism of an employee’s performance must be constructive and will only be deemed so where the employer has provided practical guidance on how to improve.

Absenteeism & Lateness Absenteeism is defined as occasional absences, while lateness refers to reporting for work after scheduled hours of work have begun. Even in establishments where there is no formal attendance policy, repeated lateness without a legitimate reason may be regarded as a serious breach of the employee’s responsibility to the employer. Where the employee cannot justify his/her persistent lateness and the conduct persists after the employer has issued warnings, the employer will be able to terminate legally.

An employer will not be able to establish cause for dismissal where an employee is unable to attend work due to illness. In such circumstances, an employer will need to determine whether the employee is indeed sick. To do so, an employer has the right to request that an employee provide a

Intoxication vs. Alcoholism An employer may be justified in terminating an employee without notice based upon a single incident of intoxication – most likely Canadian Property Management | May 2012 21

humanresources in a case where the individual is employed in a position where safety of co-workers and/or the public at large depends upon the employee’s decisions and/or actions. The mere fact that an employee exhibits signs of alcohol consumption while at work will not exclusively justify dismissal. It needs to be shown that the consumption of alcohol negatively impacted upon the employee’s ability to perform his/her job.

The Courts will take a different approach if it is found that the employee is suffering from an underlying illness: namely, alcoholism. The distinction between drinking to excess on occasion and alcoholism is, of course, medical, not legal.

Alcoholism is recognized as a disease marked not by the level of alcohol consumption, but by its chronic and uncontrollable use.

Alcoholism has been found to be a disability and therefore one is protected from discrimination by the Human Rights Code. Termination in such circumstances, therefore, will be unlawful.

Insolence In determining whether insolent behaviour justifies cause for termination, the Courts would review whether the misconduct reflects a brief lapse of judgment, which

may be rectified with a cooling off period and an apology. Courts have indicated that the more appropriate response for an employer in these circumstances might be to proceed through progressive discipline, beginning with a warning to underline that repeat episodes of such conduct would not be tolerated.

Courts will also consider whether the misconduct in question involves profanity.

The use of foul language is not cause for dismissal especially when such language is commonly tolerated in the workplace.

Probation This is defined as a trial period of usually three or six months during which the employer will review and evaluate the employee to determine if she or he is suitable for ongoing employment. Under no circumstance does this status convey the right to discriminate against or harass the employee, but the conditions for dismissal may be less rigorous.

An employee’s probationary status must be established within the written offer of employment and agreed to before the employee begins to work. If the employee accepts a verbal offer of employment that does not specify a probationary period, then no probationary period applies.

The burden is on the employer to prove an alleged probationary period. An employer may not unilaterally extend a probationary period without the consent of the employee.

An employer has the right to terminate a probationary employee without notice or severance where the employer can establish that it acted fairly and with reasonable diligence in determining if the proposed employee was suitable in the job for which he or she was being tested. The employment standards in most provinces allow the employer to terminate an employee on probation with no notice or pay in lieu of notice.

Temporary Layoff An employee is on a temporary layoff when an employer cuts back or stops the employee’s work without ending his/her employment (e.g. laying someone off at times when there is not enough work to do.) An employer may put an employee on temporary layoff without confirming a date on which the employee will be recalled to work. zz Suzanne Kleinberg is a Toronto-based career coach. The preceding article is excerpted from her recent book, Employee Rights & Employer Wrongs. For more information, see the web site at http://www.potentialtosoar.com

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humanresources

Rash Statements Provide Inadequate

Evidence of Intent Emotions Cloud Distinction Between Resignation and Termination

By Lisa Carlson Two recent decisions by the British Columbia Supreme Court illustrate the difficulties in determining whether an employee has truly resigned his or her employment. If the situation is ambiguous, employers should not assume that an employee has resigned. Even where an employee’s actions and words indicate a desire to quit, employers should still be cautious and take steps to clarify the employee’s intention.

In Haftbaradaran v. St. Hubertus Estate Winery Ltd., the employee had worked as a winemaker for the employer for approximately two years. In the course of a heated discussion, the employee refused to leave the owner’s office as requested, alleging that he was undervalued and unappreciated.

The owner became agitated and told the employee that if he was so unhappy he

24 May 2012 | Canadian Property Management

should look for another job. The employee placed his keys on the owner’s desk, shook his hand and stated: “Good luck making wine” before gathering his belongings and exiting the premises.

That afternoon the owners sent the employee an e-mail outlining that his departure would have to be coordinated, and advised that they needed a response from him by a certain date. Otherwise they would assume he had already resigned. The employee claimed he never intended to quit and alleged that he was wrongfully terminated.

The Court agreed with the employee, finding that a reasonable observer would not conclude from the employee’s words and actions that he had clearly and unequivocally quit his job, but rather that it was a heated situation and

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humanresources the employee was seeking praise. The Court also found that the winery owner’s words in the meeting were an attempt to get the employee to leave his office and were not consistent with an intention to terminate him.

However, the Court concluded that the employer’s e-mail following the meeting terminated the relationship because, instead of referencing the ambiguity of the situation and offering an opportunity for reconciliation, the employer made it clear that the employee was not wanted back. This mistake proved costly, as the employee was awarded pay in lieu of reasonable notice of eight months based on his specialized skills and the time it took to secure new employment.

A similar situation arose in Balogun v. Deloitte & Touche LLP. The employee became very upset over the employer’s refusal to give him a raise and claimed that no one at the company was qualified to evaluate his work. When the employer asked what this meant for the future, he replied, “I’m out of here” and left the premises after turning in his keys and laptop.

The employee had a two-week vacation scheduled starting that day. Upon his return home from vacation, he found a Record of Employment (ROE) from the employer indicating that he had quit.

The Court concluded that there was no clear and unequivocal evidence that the employee had intended to resign, as his statement in the meeting and subsequent departure were consistent with the fact that it was the end of the work day and he was scheduled to commence a vacation. The Court concluded that handing in his keys and laptop occurred under emotional stress, and that the plaintiff was in a rush to leave for vacation.

The Court noted that the employer did not request a letter of resignation from the employee in accordance with company policy. This was evidence of the employer’s uncertainty about the situation, and the employer’s failure to take any steps to clarify the employee’s intention before delivering the ROE. The Court concluded that the employer should have followed up by phone or e-mail or by sending a letter. By simply delivering the ROE, any obligation for the employee to contact the employer had

been extinguished. The seven-month employee was awarded two months pay in lieu of notice.

Both cases involved emotionally-charged circumstances where no chance was presented to the employees afterwards to reconcile with their employers, and the employers took no steps to seek clarification from the employee.

Employers should follow up with the employee immediately or very soon after the incident to clarify or confirm the employee’s intentions to resign, and request written confirmation of resignation, especially where it is normally the employer’s policy to do so. They should also provide the employee with an opportunity to resolve any conflict or differences with the employer. zz Lisa Carlson practices labour and employment law with Borden Ladner Gervais LLP in Vancouver. The preceding article is reprinted from BLG’s Labour and Employment Law News, Winter 2012. For more information, see the web site at www.blg.com.

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Quick-Dry Carpet Cleaning Easily Applied Detergents Enclose and Crystallize Soil

By Mike Sawchuk

The encapsulation method of carpet cleaning is neither a new technology, nor one that could formerly be defined as sustainable. However, improved product formulation now makes it a competitive alternative to shampooing or extraction. The low-moisture procedure also reduces the potential for mould and mildew growth that can occur if carpeting does not dry promptly.

New chemistries – some now in greencertified products – and application methods have largely erased the residue once left behind by cleaning chemicals, which often contributed to rapid resoiling of the carpet.

Many property/facilities managers and cleaning professionals are now testing and reassessing encapsulation after largely abandoning the technique in the 1980s and 1990s due to problematic products that left a chemical film on carpet and raised health and environmental concerns.

“We are now in the third generation of this technology, and most of the bugs that came up with the older methods have been eliminated,” reports Mark Warner a cleaning specialist who has served as 28 May 2012 | Canadian Property Management

President of the Low-Moisture Carpet Cleaning Association (LMCCA).

Perhaps confusingly, low-moisture carpet cleaning does not refer to the amount of water used during cleaning or the extraction of moisture from carpets. Rather, it is any method of carpet cleaning that ensures carpets dry in approximately two hours after cleaning under moderate climate conditions.

The encapsulation method uses chemical detergents that work their way into carpet fibres, where they loosen and begin to enclose soils. Some encapsulation products also dehydrate soils so that they no longer adhere to carpet fibres, making them easier to remove through vacuuming.

These chemical detergents can be applied using a microfibre bonnet pad, a shampooing device or a cylindrical machine. When the chemicals have dried, typically in less than 24 hours, they are vacuumed up along with the soils they’ve trapped. Routine vacuuming continues to remove any remaining chemical/soil traces – resulting in what some managers and cleaning professionals

report as carpets actually looking cleaner over time.

To begin, as with all carpet cleaning methods, the area to be cleaned should be pre-vacuumed with an effective highperformance vacuum cleaner. Capturing the dry removable soil to the greatest degree possible will allow the encapsulation chemicals to more effectively loosen and dissolve embedded soils.

Next, chemicals are applied to the carpet, either by hand, with a sprayer or with a rotary or cylindrical brush machine. The chemicals then need to be agitated to work them into the carpet. A rotary or cylindrical brush machine is recommended for this step.

Chemicals crystallize within 30 minutes to an hour after application, and carpets are then vacuumed to remove these crystals and the soils. This dry-process cleaning can be carried out much faster than other methods, to clean as much as 5,000 square feet of carpeting in an hour.

Because it takes less time to clean large areas, the encapsulation method can prove to be very cost-effective. The machines used to agitate carpeting – especially cylindrical machines – are relatively simple to use.

Likewise, the encapsulation cleaning method is fairly easy to perform and does not require much special training.

Nevertheless, not all encapsulation chemicals can be classified as green. Just as when selecting other cleaning products, purchasers are advised to look for encapsulation products that have been certified by GreenSeal, Canada’s EcoLogo program or recognized as safer by the U.S. EPA’s Design for the Environment Program. Additionally, products that have earned the Seal of Approval from the Carpet and Rug Institute (CRI) have been identified as effective carpet cleaning solutions and equipment. zz Mike Sawchuk is Vice President and General Manager of Enviro-Solutions, a manufacturer of green cleaning products based in Peterborough, Ontario. For more information, see the web site at www.enviro-solution.com.

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Outsourcing Oversight

Contractor Management Part of Corporate Governance

By Cal Fairbanks Contractors and suppliers contractors and suppliers in advance of must comply with applicable regulatory actual contracting or procurement. This requirements. Failure to do so could should be an ongoing practice. expose the building owners and managers In Canadian jurisdictions that allow who have hired them to litigation and on-line clearance of worker's fines. Beyond that, employers have compensation coverage, software is now societal and business obligations to available to automatically check workers’ safeguard against workplace injuries, loss compensation status of contractors/ of life, environmental damage, financial suppliers – a service that should also mismanagement and substandard work. benefit suppliers and contractors by Good corporate governance involves more streamlining the provision of valid than simply meeting regulatory requirements. clearance letters to prospective employers It should examine relationships with and ensuring that they don't lose work due contractors, suppliers and contracted workers to an expired clearance letter. xmQuarter20011v1.pdf 3/24/2011On-line 1:04:10 PMquestionnaires and flexibility for throughout the procurement life cycle. That covers prequalification and health, safety and contractors/suppliers to upload required environmental approval through the bid documents simplifies the process. These process, mobilization, operations and documents can also be securely shared with completion of work, including feedback other internal and external users to track loops and continuous improvement. communication flow between employers Prequalification procedures gather relevant and contractors/suppliers and other data on information and documentation for individuals, assets and processes.

Project completion sign-offs, invoices and other transactions should be evaluated against master service agreements, statements of work, service level agreements and other requirements.

This can simplify the process of collecting feedback on projects, performance and deficiencies.

Tracking performance measurements over time helps employers to see a fuller picture of what contractors and suppliers bring to the business. Meanwhile, tracking deficiencies and opportunities for improvement is a key step that is too often overlooked. A life cycle approach to procurement and outsourcing closes the gap between the last payment and the next bid call. zz Cal Fairbanks is President and CEO of ComplyWorks Ltd., a supplier of contractor/supplier management software systems. For more information, see the web site at www.complyworks.com.

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