Canada: Directors fiduciary duty in a pandemic: You need a protocol!
COVID-19 has had and will continue to have impacts on virtually every corporation in Canada and globally.
Canadian farmers, ranchers and dairy producers have always valued being able to operate their businesses independently and relatively free of regulations. So, when the Government of Alberta recently enacted Bill 6 – Enhanced Protection for Farm and Ranch Workers Act (the “Act”), it led to extensive criticism and widespread protests on the steps of the provincial legislature by farmers and ranchers. At issue was the extent of intrusion on their way of life, including their ability to involve their children in their operations. The Act and accompanying regulations will result in the elimination of many long-standing exemptions granted to Alberta’s farms and ranches from workplace standards and obligations. The impending changes resulting from the controversial Act, while new to Alberta, are not new to farmers and ranchers in other Canadian provinces.
In Canada, there are four main legislative regimes that impact the standards of employment and workplace safety. Legislation related to employment standards establishes the minimum standards of employment, including hours of work, overtime, holidays, vacation and minimum wage. Labor relations legislation gives workers the right to unionize, participate in collective bargaining, and to strike under certain conditions. Workers’ compensation legislation provides for a type of no-fault disability insurance, where employers are responsible for paying a premium, so employees who are injured at work receive compensation for lost income, healthcare and other related costs. Occupational health and safety legislation establishes minimum workplace safety standards and obligations to minimize the occurrence of workplace accidents.
Prior to the Act, much of Alberta’s legislation governing employment standards, labor relations, workers’ compensation and occupational health and safety did not apply to farm and ranch workers. In late 2015, Alberta enacted the Act to “make farm work safer and bring Alberta in line with the protections that farm and ranch workers in other Canadian provinces enjoy”. As a result of the Act, Alberta’s farms and ranches will face a significant change in landscape. As of January 1, 2016, workers’ compensation coverage became mandatory for paid farm workers, excluding family members (“family member” is defined to include spouses, adult interdependent partners, children, parents, grandparents, siblings, aunts, uncles, nieces, nephews and first cousins). At the same time, basic standards under occupational health and safety came into effect for paid workers while onsite. Meanwhile, changes to the employment standards and labor relations legislations are still being developed.
Under the changes to occupational health and safety legislation, farm and ranch workers can refuse unsafe work, and occupational health and safety officials can go on farms to investigate serious injuries and fatalities. Farming and ranching operations must familiarize themselves and ensure compliance with the extensive new obligations, the failure of which may result in stop-work orders, significant fines, and/or imprisonment. The Act excludes the application of occupational health and safety obligations from owners of a farm or ranch operation, family members of the owners, and friends and neighbors who volunteer their time on the farm or ranch. Detailed occupational health and safety standards specific to farms and ranches will come into effect over the next eighteen months.
Under the changes to workers’ compensation legislation, workers’ compensation coverage has become mandatory for all farm and ranch workers in Alberta, excluding family members and friends and neighbors who volunteer their time.
While the specific changes stemming from the Act are still being rolled out, interested parties have expressed extensive concern over the potential effects of the Act. For instance, the Act struck out, in its entirety, the exclusion of farm and ranch workers from the requirements under employment standards legislation. This raises the concern that employment standards requirements will apply to farm workers indiscriminately, thus failing to take into account the sporadic nature of farming operations. Specifically, employment standards requirements relating to hours of work, overtime and mandatory breaks would interfere with the flexibility that is required to work longer days during seeding, harvest and calving seasons.
The current wording of the Act with regards to labor relations legislation suggests that farm and ranch workers will have the unfettered right to unionize, participate in collective bargaining, and potentially strike. Farm owners generally fear that such rights would significantly interfere with seasonal operations due to the time- and weather-sensitive nature of farming.
In British Columbia, most sections of the employment standards legislation and regulations apply to farm workers, with certain exceptions including hours of work, overtime and statutory holidays. While farm workers are not entitled to overtime pay, they must not work excessive hours detrimental to their health or safety.
In Saskatchewan, the minimum employment standards, such as hours of work, overtime, statutory holidays, vacations, required periods of rest and minimum wage do not apply to workers whose primary duties consist of actively engaging in farming, ranching or market gardening activities. However, those standards do apply to workers in egg hatcheries, greenhouses, nurseries, bush clearing operations and commercial hog operations. Further, family farms are exempt from minimum employment standards.
In Manitoba, some sections of the employment standards legislation apply to agricultural workers, while others do not. While agricultural workers are subject to employment standards requirements relating to minimum wage, termination notice, vacations, weekly day of rest, work breaks and restrictions on deductions from pay, they are not subject to requirements with regards to hours of work, overtime and general holidays. The employment standards legislation also differentiates between family members who work on the farm, and paid non-family workers, with family members exempt from almost all employment standards requirements.
In Ontario, there are different categories of agricultural workers covered by the employment standards legislation, each with their own set of exemptions or special rules. For instance, the “farm employee” category applies to employees whose employment is directly related to the primary production of eggs, milk, grain, seeds, fruit, vegetables, etc. Farm employees are exempt from provisions in the employment standards legislation relating to minimum wage, hours of work, daily rest periods, time off between shifts, weekly/bi-weekly rest periods, overtime, public holidays and vacation with pay. However, they are covered by employment standards protections relating to regular payment of wages, leaves of absence, termination notice and/or termination pay, and severance pay.
Another category is “harvesters of fruit, vegetables or tobacco”. This category includes workers employed on a farm to harvest, or bring in, crops of fruit, vegetables or tobacco for marketing or storage. Workers under this category are exempt from some minimum requirements such as hours of work and overtime, but are subject to special rules with regards to public holidays, vacation with pay, and minimum wage. Harvesters are entitled to minimum wage, vacation pay and public holidays in some cases, while farm employees are not.
Currently, eight provinces in Canada allow farm workers to unionize and participate in collective bargaining. In Manitoba, every employee has the right to be a member of a union, and to participate in the activities of a union. In Saskatchewan, employees have the right to organize in and to form, join or assist unions, and to engage in collective bargaining through a union of their own choosing. In British Columbia, every employee is free to be a member of a trade union and to participate in its lawful activities. No exemptions are allowed for farm workers in the labour relations legislations of those provinces.
In Ontario, the Agricultural Employees Protection Act allows agricultural workers to form associations but not unions. The Supreme Court of Canada, in a 2011 decision, upheld this legislation. As a result, agricultural workers in Ontario have the right to make representations to their employers through an employee’s association respecting the terms and conditions of employment, but cannot force their employers to negotiate collective agreements.
In British Columbia, the occupational health and safety regulations require every workplace that employs workers, including farms, to have a mandatory health and safety program. This program must include the employer’s aims and responsibilities with respect to occupational health and safety, regular inspection schedules, written directions for employees, maintenance of statistics and records, and a regular review of occupational health and safety standards and their implementation. Only employers with twenty employees or more in a workplace that has a moderate to high risk of injury must develop and maintain an occupational health and safety program. Hence, smaller farming operations are subject to less onerous occupational health and safety obligations.
In Saskatchewan, the occupational health and safety legislation applies to all workplaces, including farms. Farm workers are given the same basic health and safety rights, including the right to know about the hazards of their jobs and how to deal with those hazards, the right to participate in health and safety education and training in the workplace, and the right to refuse work that they believe to be unusually dangerous.
Saskatchewan’s occupational health and safety legislation places responsibilities and obligations on everyone who works in a workplace, including employers, workers, selfemployed individuals, contractors and suppliers. The level of responsibility for each of those groups is based on the extent of their authority and control over the workplace. For instance, the employer has the most control over the workplace, and thus has the greatest responsibility to ensure that occupational health and safety standards are met.
In Manitoba, agricultural operations have been covered under the occupational health and safety legislation since 2009. Every employer must ensure the safety, health and welfare of all their workers. The legislation provides directions on how farm employers should protect their farmworkers, as well as how workers are required to protect themselves and others.
In Ontario, agricultural operations have been covered under the occupational health and safety legislation since 2006. The occupational health and safety legislation applies to all farming operations that have one or more paid workers – i.e. any person who provides labour on a farm in exchange for a wage, regardless of the person’s relationship to the farm. Unpaid workers and selfemployed persons without any workers are exempt. Paid workers have the right to receive information on workplace hazards and toxic substances, receive instructions and supervision for farm equipment or hazardous locations, participate in identifying and resolving workplace health and safety concerns, and refuse or stop work that they believe is dangerous.
Ontario’s occupational health and safety legislation creates shared responsibility between employers and workers in creating and maintaining a safe workplace. For most cases in agriculture, the workplace is considered to be the farm property excluding any personal residence. Where an employer has six or more regularly employed workers, it must prepare and post a written and signed health and safety policy, and must develop and maintain a program to implement the policy.
In British Columbia, the workers’ compensation legislation applies to all employers and workers engaged in paid work. All commercial farming operations are covered under the workers’ compensation regime, regardless of size. Certain workers may be exempted based on the duration of employment and whether employment takes place at a private residence. Employers who employ individuals for regular ongoing services around their homes for less than eight hours a week are exempt, but can purchase voluntary coverage. Employers who employ individuals for specific one-time projects around their homes for less than twenty-four total hours a week are exempt, but can also purchase voluntary coverage. Unpaid workers such as family members assisting with chores or seasonal activities are not included under the legislation.
In Saskatchewan, the workers’ compensation legislation contains exemptions for certain areas within the agricultural industry, such as dairy farming, feedlot or livestock yard operation, fur farms, grazing cooperatives, piggery farms and poultry farms.
In Manitoba, the workers’ compensation regime applies to all employers and workers in all industries, but allows for exemptions for family members engaged in farming activities on a family farm. Family members include spouses, children, parents, siblings, and any other person whom the farmer considers to be “like a close relative’, whether or not related by blood, adoption, marriage or a common law relationship. This exemption is very liberal, as it exempts nearly any close friend, hence allowing family members and neighbors to work together on family farms without the mandatory requirement to obtain workers’ compensation coverage. Family farms may apply for voluntary coverage.
In Ontario, agricultural employers are required to provide workers’ compensation insurance coverage to their employees. An employee is anyone who provides labor on the farm in exchange for a wage. This includes all relatives and neighbors who receive a wage. Family members and neighbors who volunteer on the family farm are exempt.
As shown, the legislative regimes governing the standards of employment and workplace safety in the agricultural industry varies significantly from province to province in Canada. Although there appears to be no consistent minimum standard that is applicable across the provinces, agricultural workers are subject to certain exemptions from employment standards requirements in all the provinces. However, it remains to be seen, what the full impact of the legislation will be in each region.
COVID-19 has had and will continue to have impacts on virtually every corporation in Canada and globally.
As business resumes in the workplace and circumstances change, American companies must be ready.