Employment Law Basics for Start-ups and Small Companies in Ontario [video]

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Start-ups and small companies usually focus their energies in establishing their business and sometimes ignore the importance of creating proper workplace policies. When issues arise later, as they always do, these companies end up wasting significant resources in dealing with these issues during a dispute resolution process. This lecture provides basic guidance for start-ups and small companies so that they can pay attention to workplace policies without breaking the bank.

This lecture is taught by Amer Mushtaq, LL.B., M. Engineering , B.Sc. (Hons.), who is the Principal and Founder of Formative LLP.   Through his YouTube channel, YouCounsel, Amer shares practical advice from his years of legal experience to help anyone access justice and achieve their goals.  Subscribe today to learn more.

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Welcome everyone, this is Amer Mushtaq from You Counsel. Today, we’ll talk about some of the basic concepts of employment law with respect to small companies and start-ups in Ontario. If you are a small company or a start up, it is understandable that your main focus is to establish your business and grow your business and that’s where you are spending your time and money, and the workplace issues/workplace conflicts are really not at the top of your mind. What I want to tell you is that from, my experience, if you have not thought about workplace issues, if you have not established policies, until and unless you have replaced every single employee with robots or artificial intelligence, you’re not immune to workplace issues and they’re bound to happen.

And in most cases, when we’re dealing with small companies and start-up companies when they’re dealing with workplace issues, they are in a reactionary mode. When the workplace issue has already arisen and somehow they are in some sort of litigation or complaint process to deal with. And when you deal with those issues at that time, the cost in terms of time and effort and money is significantly higher than what you could have done at the outset if you had thought about it.

So, the idea of this lecture is how do you pay attention to employment law issues at the outset without wasting too much time, without spending too much time, and without spending too much money in dealing with these issues. So, we’ll talk about some of the basics, obviously, the recommendation is that as you grow as your business develops you want to focus more on workplace issues and develop more sophisticated policies and procedures, but at least you got to have something in place, so that, when you’re faced with employment law issues at the workplace you are able to appropriately handle them.

Will begin with a disclaimer, that this course is not legal advice, so, if you have any specific questions you should obviously contact a lawyer or paralegal.

So, what are the key considerations we’ll talk about? We’ll discuss employment contracts, why they’re important, and what you should consider putting in employment contracts. We’ll talk about anti-harassment and anti-violence policies, we’ll talk about Human Rights policies, and we’ll talk about any other important policies that are essential for your specific workplace.

Now employment contracts, the first thing I want to emphasize is that when you hire employees, or independent contractors, or anyone else to work for your company, you must make sure that your employment contract is in writing. You also want to make sure that the employee or the independent contractor and/or anyone who is going to work under that contract has executed, has signed, has understood the employment contract before they have started working for you. The new employment contracts should not be a surprise for them, should not be something that they have signed after they have started working. We have a separate lecture on employment contracts … you should review that, but in this lecture we’re emphasizing that employment contracts are important, are essential they must be in writing.

And one thing that you want to make sure in your employment contracts that there is a termination clause, there is an exit clause. In your hearts of heart, you may have hired that employee or the contractor to work for your company for the rest of his or her life, for the rest of your life, but there are always circumstances when parties have to move in different directions. So, it is essential that your employment contract at the minimum has a termination clause, and that termination clause is properly drafted, it’s lawfully drafted, it’s enforceable, and it protects your rights appropriately.

Make sure that you’re not asking your accountant to draft a termination clause, and I’m not joking when I say that. I have dealt with a number of small companies start-up companies who rely heavily on their accountants for all kinds of stuff, including employment contracts which is fine, but that will get you into trouble later on when you have an issue. So, make sure that you have properly drafted termination clauses in your employment contracts at the minimum, that’s something that you must have. Obviously your employment contract will have some of the basic stuff like salary, and responsibilities, and hours of work and vacation, and whatnot, but you don’t want to ignore the termination clause.

Another part that you want to keep in mind is that if your business requires certain restrictions on that employee after they have left your employment, either because of termination or resignation, are there any restrictions that you want to impose on that employee? And the answer to that, is it really depends upon the kind of business you operating. Do you have genuine concerns about that employee competing against you? Do you have genuine concerns about that employee somehow taking away your intellectual property rights? Do you have genuine concerns about that employee soliciting your other employees or your clients? If your concerns are genuine, objectively then it will be worthwhile for you to have appropriate restrictive covenant which controls what an employee can and cannot do after that employee has finished employment with your company.

So, it’s important but it’s not something you should use if there is no value to it.

So, the key message that you want to carry from employment contracts is that it should be in writing, it must have a termination clause, and then you don’t need a 15-page employment contract. A 15 page employment contract if its not dealing with specific issues that are relevant to your company, that are important to your company, is actually going to come back and harm you. Because when the court will review that employment contract at a later stage they will come back and give comments and judgments which will not be helpful to you because you have gone overboard in drafting an employment contact that had no real connection to the employment relationship. So, your employment contract could be one page could be two paragraphs, could be one paragraph, it could be as simple as that, but you want to make sure that you have put in some thought into that employment contract …. it is relevant, it is reasonable, and it is signed by the parties before the contract is commenced.

Okay, anti-harassment and anti-violence policies, why I picked that as a second topic is because these policies are mandatory. As long as you are an employer under the Occupation Health and Safety Act of Ontario, you are required to have anti-harassment and anti-violence policies at the workplace, it’s not your choice, it’s mandatory. Now, if you have six or more employees at your workplace then those policies, anti-harassment, and anti-violence policies must be in writing. You have to provide copies of those policies to the employees, and in certain circumstances, you have to post those policies at different places in your workplace, and you have to provide training to your employees so, that they understand what are their rights and obligations under anti-harassment and anti-violence policies. So, it is important for you to understand what those policies are, what is their function, how do you implement those policies, and again, my point is that you don’t have to have elaborate books on anti-harassment and anti-violence policies, but these have to be policies that are thoughtful, that understand that harassment can arise in some circumstances at work. And then if it does arise, how do you deal with that, how do you investigate, how do you respond? And how do your employees, when they’re faced with some harassment or violence at the workplace, how do they go about complaining about this, how do they report it, and how do they look after their own personal safety and others safety? So, these policies are mandatory and you must have them in place.

Human Rights Policies. Human Rights policy, it’s not a mandatory requirement but considering the Human Rights issues that arise in the workplace it will be well advised that you have a written Human Rights policy in place. Human Rights policies obviously, I have seen Human Rights policies for some of the bakeries that I dealt with, and they had a Human Rights policy, which was literally two or three paragraphs. And it talked about the value of Human Rights in the workplace. It talked about the application of the Human Rights code, and it talked about the investigation process. So, if an employee is faced with a Human Rights issue how do they comfortably make a complaint about that? How is the investigation going to be held? And then how is that complaint going to be dealt with by the employers? So, those are some of the things that you want to cover in a Human Rights policy and then obviously, if you need to provide training to your employees with respect to Human Rights issues, that will be a good idea and then you make sure that you provide that training to your employees.

Now, other key policies, when I say the key policies that really depends upon the kind of business that you are in. So, for instance, if you are in a business where your employees are bringing their own devices, you know B.Y.O.D., bring your own device to work place, using their own cellphone, or laptops for company purposes, or using company devices also for their personal business, then sometimes it is important to have a privacy policy that clearly defines which part of data on the on those devices has privacy and doesn’t have privacy right. So, that may be a relevant consideration. If you are a manufacturing facility for instance then you may have, it is essential for you to have workplace health and safety policies under the Occupation Health and Safety Act.

If you’re dealing with a large number of customers, then you may want to have a specific code of conduct where your employees know how to deal with the customers, or vendors, or anybody else, or third party people at the workplace.

So, depending upon the nature of your business you may make certain policies, which relate to your business and you want to make sure that your employees follow those policies. So, those are some of the policies that you want to add into your workplace situation.

Now, what is the key message here? The key message you want to keep in mind is that when your workplace issues are being examined by a court, by a judge, by a tribunal, they don’t care about the volume of documents with respect to policies that you produce. There’s always an emphasis on substance over form. So, if you create amazing, prolific workplace policies that go in-depth about how these things are handled, but in reality those policies are not implemented, those policies are not cared for, then those paper documents will actually go against you. So, what court is looking for is really … have you given thought about these policies? Have you taken your responsibilities seriously? And then if you have, what steps have you taken with respect to protecting your workplace and protecting your employees? And so, when the court is looking at your policies with respect to your company, it is looking at your resources too. So, if you are a bank in Canada then the way the court will consider your obligations may be slightly different than if you are a dollar store in Etobicoke, right? So, the idea is that if you are a sophisticated employer, you are bound to have better workplace policies, more sophisticated policies, and make sure that they’re implemented properly. But if you’re a smaller employer, the purpose of all of these policies is to make sure that you understand your obligations, you understand your employees’ obligations, and you’re putting in some effort with respect to making sure that everyone’s rights are protected.

You also want to make sure that once you have listened to this lecture, you want to go and find some resources that help you in drafting those policies and in making sure that you’re on the right side of the law and I have given you a bit of a list here. There are sort of three key places that are provided, three links, actually four. One is for the Ministry of Labor Employment Standards Branch, one is for Ministry of Labor Health and Safety, Human Rights Tribunal of Ontario, and Ontario Human Rights Commission.

Let me quickly take you know those websites this is the Ministry of Labor website and I have already opened the employment standers page on it. And if you scroll down you will see it provides a resource your guide to the E.S.A. And if you spend some time reviewing this, this is not a very lengthy guide, but it provides you all of your responsibility is that you need to follow. With respect to posting certain posters that you are required to post, with respect to record keeping, with respect to payment of wages, hours of work, overtime, holidays, so, on and so forth. So, these policies are already there all you have to do is just review them and make sure that you are following.

Okay, this is the page for the Occupational Health and Safety Act and we talked about workplace violence and harassment policies. And those policies are available here, you can review the requirements for work place violence and harassment, how is it defined, what are your roles and responsible, and how do you actually go about creating those policies for your workplace?

Similarly, we have the Human Rights Tribunals of Ontario website. It provides its own resources; it has all the decisions that Human Rights Tribunal has made in different circumstances. So, you can review those decisions to understand how the Tribunal provides judgments on different matters.

You also have Ontario Human Rights Commission which provides a lot of training resources learning on their website. You can check the education and outreach section and it has a bunch of e-learning modules that are listed here, that you can review and understand the concepts a bit better.

So, this is the idea, that you review these resources, you put in some time and effort to make sure that your policies are in place. So that, if there is an issue that you’re faced with in the workplace, you have some framework in terms of how to deal with it, and your employees have some understanding of how to deal with those issues, how to bring them to your attention if they are faced with any of those issues that we discussed. Hopefully, this gives you a basic understanding of the fundamental concepts of employment law in a small workplace, in a start-up company and we’ll keep building on this and we’ll be happy to add more lectures.

Please provide us with your comments, and if you have any more questions please let us know and we’ll keep adding those in future lectures. Thank you for watching.

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