Série de webinaires du groupe Travail, emploi et droits de la personne | Le bureau à distance (disponible en anglais)

Elisa: Okay, I think we should get underway now. It's about 8:32 so I'd like to welcome those that have joined, to the second webinar of our 2022 webinar series, being presented by the Gowling Employment, Labour and Equalities group. I'm Elisa Scali. I'm a partner with Gowling and I practice in the Employment, Labour and Equalities group. If you missed our first webinar, which was on the Right to Disconnect, you can find the link to that recording of the webinar in the chat today. As you know, today's webinar is on the Remote Workplace and Remote Work. We'll be reviewing with you a broad range of legal issues related to remote work within the context of an employment law, human rights, occupational health and safety, tax and immigration. We have with us today a distinguished panel of my Gowling colleagues to help us unpack some of those legal issues.

So I'll start by introducing you to Melissa Roth. She is a partner in our Waterloo office. Melissa's practice focuses exclusively on employment law. She works with employers on a wide range of issues from human rights to wrongful dismissal, employment contracts and policies and occupational health and safety. Outside of the workplace, Melissa's a mom of two and she enjoys spending time with her family outdoors.

Cedric Marsan-Lafond is an associate coming to us from our Montreal office. Like Melissa, Cedric's practice focuses on exclusively on employment law. Cedric assists clients with drafting employment documentation, such as agreements and policies, and also routinely advises employers on various matters relating to labour standards, dismissals and disciplinary measures.

We also have Laura Gheorghiu joining us from our Montreal office. She's a partner there, working in our National Tax group and her tax practice focuses on mergers and acquisitions, cross-border investment structures, corporate reorganizations and providing advice on private equity funds. She also advises employers on taxation issues involving stock option plans, employer payroll and pension obligations. Laura practices in English and French and she is also fluent in Romanian.

Carole Chouinard also practices in the area of taxation law. She works with me out of our Ottawa office and our remote home offices just happen to be blocks away as well. In addition to working as part of our National Tax group and providing tax planning advice to corporations and individuals, Carole also provides advice on cross-border tax issues and acquisition of business transactions. She also advises tax exempt organizations regarding structuring, donations and compliance matters.

And last, but not least, we have Krista Schofer coming to us from the early morning from our Calgary office. Krista has a broad practice which includes employment, immigration and privacy. She leads our Western Canadian immigration practice. She is also a US attorney and advises on US immigration law. In addition, she advises on privacy compliance and data protection issues and does also provide guidance to employers on all aspects of the employment relationship.

Okay, before we begin I'd just like to mention a few things. Today's session will be recorded. The link to the recorded session will be sent to the participants following today's webinar. The PowerPoint will also be provided to you following the webinar today. Also, if you have any questions, the Q&A will be open so please add your questions to the Q&A. If we've not answered your questions throughout the presentation, we will be preparing a Q&A response, that will be distributed as well following the session today.

Right, so let's get underway. Again, our presentation today is on remote workers. Now prior to the pandemic remote work was certainly the exception and not the rule, however, during the pandemic remote work was essentially forced upon the majority of employers out of necessity to protect the health and safety of their workers. No one could have predicted how long we would be working remotely or that remote work would actually work. After 2 plus years working remotely, remote work became the new normal. Employees proved that they could be productive working remotely and employers have had a shift in the mindset and are more willing to consider remote work on a more permanent basis. In February and March of 2021 BDC actually did a survey of 700 businesses and 2,000 Canadian workers and, of those businesses surveyed, 74%25 said that they would continue to permit employees to work remotely. 55%25 of the employees say they prefer to continue working remotely. That actually seems low to me. I thought it would be higher. 54%25 of employees say access to remote work is a determining factor when they're applying for and accepting a new position. 48%25 that had moved during the pandemic factored work into their decision. Remote work certainly appears to be here to stay for the long term. Although remote work has its advantages for employers and employees, it does add a layer of complexity to the employment relationship. In particular, where you have remote workers working in jurisdictions where you do not necessarily have a physical premises. So today what we're going to focus on in the first part of the webinar are the areas of law where remote work may have an impact and we will review those with you. The second part will be a little bit fun discussion. We'll have a panel discussion. I'll have some scenarios for our panel and they will provide some guidance throughout those scenarios that relate to remote work and provide you with some best practices.

So we're going to start today with employment standards and how employment standards might be impacted where you have remote workers. With that shift to remote work, if you have workers working in different jurisdictions, you need to ensure that you're applying the appropriate employment standards legislation. So typically, employment standards legislation of the Province where the remote worker is physically located, and where the work is ordinarily performed will govern the employment relationship. So for example, even if you're an Ontario based company, if you hire an employee to work remotely in British Columbia and that employee works exclusively in British Columbia, then the British Columbian Employment Standards Act will apply. It doesn't necessarily matter that the offer of employment was made and accepted in Ontario; that your contract provides that Ontario law will apply; that your wages, your payroll, might be paid out of Ontario; that your an Ontario corporation and you may only have physical premises in Ontario. If the employee is not performing work in Ontario, then the Ontario employment standards will not apply. Next slide, please.

However, where things become a little tricky especially in this world of remote work, is where an employee performs work from two jurisdictions, then the applicable law may not be as clear. As we have seen through the pandemic that employees hesitate to go work from a cottage, to work from a vacation home, to work from the home of maybe a family or friend that might be in a different jurisdiction than where they would normally work. Also, employers are being a little bit more flexible and they are considering work from anywhere policies, to give flexibility to their employees and deal with retention issues. But with that raises that issue of which laws apply, if this employee is working in two different jurisdictions. So in some Provinces the employment standards legislation may apply both when work is performed within the Province and outside the Province where they ordinarily perform their work. For example, in Ontario Employment Standards Act applies to work to be performed in Ontario and if there's work performed outside of Ontario, if that work is a continuation of the work they were performing within Ontario, then the Employment Standards Act will apply. For example, you have an employee hired to work and perform work in Ontario. That employee has an ailing parent in BC. They want to be able to go work remotely in BC on occasion. You have a remote work policy so you let them work remotely on occasion from BC but they go back and forth. They're still performing most of their work in Ontario. In that case the work performed in BC would likely be viewed as a continuation of the work being performed in Ontario. However, perhaps that employee wants to spend more time in BC so they decide they're going to move there. Maybe it's temporary. They're working 100%25 of the time from BC. There's no back and forth between BC and Ontario and then it reaches a point where there isn't really any indication that that employee will return to Ontario. So at that point it may be that that work is no longer a continuation of the work performed in Ontario and BC law applies. Now a third scenario, which gets even more complicated, is where you could have dual jurisdiction and the employment standards of both jurisdictions apply. So in each case you have to look at the individual circumstances surrounding the work and you have to look at the employment standards in the relevant jurisdictions to determine which employment standards legislation will apply. Next slide, please.

It is important to understand what employment standards laws apply because there can be significant differences between the minimum employment Provincial standards. Minimum wage varies from Province to Province. The rules regarding hours of work may vary from Province to Province. Overtime provisions will vary. For example, in Ontario overtime pay is payable where an employee works in excess of 44 hours but in Nova Scotia that threshold is 48 hours. Then in Alberta, the laws are even different, and the overtime pay rules are based not only on hours worked in a week but hours worked in a day. So these provisions can vary significantly between Provinces. Also the minimum vacation entitlements. Public holidays. You may have employees in different Provinces but you're not all sharing the same public holidays. The leave provisions may be different and termination. Termination provisions can vary from Province to Province. In Ontario, we're the only Province that has severance pay obligations. In Nova Scotia they have very unique provisions that apply to employees with service 10 years or more. In Nova Scotia you are not permitted to terminate an employee with 10 years or more of service unless you have good reason or cause for termination, and if there isn't good reason or cause, that employee could seek reinstatement to their position. Quebec has similar rules that apply to employees with 2 years or more of service and I will let my colleague, Cedric, provide you more details with respect to those provisions. The point is that all of these provisions are different and we have to ensure that we're in compliance with them in employment standards and we know, given the current case law trends, that it's very important that our employment agreements are compliant with employment standards, or else the entire enforceability of our agreement may be at risk. Next slide, please.

Now another area that's impacted by remote work and physical location is Workers Compensation. So generally the fact that a person is working remotely does not preclude them, if they sustain an injury, from that injury being covered by Workers' Compensation coverage. So an employee should sustain an injury while working remotely, and if there is mandatory coverage, that injury may be covered. For example, employees in their office, for whatever reason in the course of performing work they trip over a cord, they trip over their desk, something, and they injure themselves that could be covered. Now, whether or not coverage is mandatory in the location where that remote worker is located will need to be determined, with reference to the Workers' Compensation legislation in that Province. Now, the fact that you may not have a physical premises in that Province, or even conduct business in that Province for that matter, is not going to be determinative of whether you will be required to register for Workers' Compensation in that Province. Similarly, if you only have remote workers in that Province and you are not even required to register for Workers' Compensation in the Province where you do business and have a physical premises, that also is not going to be determinative. So you could be in Ontario, you may carry on business, you may not have to register for WSIB, but you could have remote workers in BC, in PEI, Nova Scotia and you may actually be required to register for Workers' Compensation in those Provinces. So you have to look at each location where you have remote workers, look at the Workers' Compensation legislation and determine whether there is a requirement to register for Workers' Compensation, because a failure to register could result in significant penalties being imposed. These penalties will vary Province to Province, but if you should have registered and there is a period of time where you are not registered, there could be penalties imposed on the company. So now I'd like to turn it over to Melissa.

Melissa: Thank you, Elisa. With occupational health and safety we have some interesting situations and some gaps in the law. The occupational health and safety laws related to remote work arrangements may be different in each jurisdiction across Canada. In most situations there is little to no formal guidance available. Perhaps because remote working was really, as Elisa pointed out, not a prevalent thing in the past. So the pandemic obviously led to a significant increase in teleworking and Stats Canada has released data on working from home that shows that the rate of Canadian employees, age 15 to 69 working from home, increased from 4%25 in 2016 to 32%25 at the beginning of 2021. Clearly the occupational health and safety laws were not necessarily dealing with this issue before and we haven't seen any amendments to apply with respect to the pandemic. So in several Provinces we do have provisions that address workers who work alone, or in isolation, and that may be applicable to those working from home and those lone worker provisions often impose obligations on the employer such as developing and implementing regular check-in procedures with these employees, implementing safe work procedures to reduce, identify risks. So if employees working alone and also conducting hazard assessments and other things. The extent of the applicability of these lone worker provisions to remote work arrangements is not clear in all circumstances, however, it would really seem counter-intuitive to think that an employer can escape health and safety responsibilities, or obligations, simply because their workforce is remote. This would certainly lead to an undesirable result for employees which is certainly what the legislation contemplated.

In the next slide we have specific information with respect to Ontario. In Ontario, under OHSA, as we know it is a multi-party obligation to maintain health and safety but clearly employers, in all jurisdictions, have the greatest responsibilities with respect to health and safety in the workplace. Those include, for instance under OHSA, the duty to ensure that equipment, materials and protective devices are in good condition so perhaps think about this when people are working remotely. Also have to think about safety measures and procedures that may be applicable and that have to be carried out in the workplace, and the employer has those responsibilities and obligations, and also an obligation to instruct, inform and supervise workers on how to protect their health and safety. We do have under OHSA, as noted in the slide, you have the language of a provision that some will say that it can be read to mean that if your employee is working in their own home office OHSA does not apply, however, not everyone agrees with that interpretation and as I mentioned, it would seem counter-intuitive. Nova Scotia also has similar provision in their occupation health and safety legislation. So while it remains unclear to what extent OHSA applies to work from home arrangements, and there is no definitive case law on this point that we're aware of, we still recommend that employers continue to comply with their obligation under health and safety, to the extent possible including when there is remote working arrangements, and this may include ergonomic inspections; it will include joint health and safety committee requirements and obligations obviously regarding violence and harassment provisions of OHSA, specifically in Ontario, which logically continue to apply even if the employee is working from home.

In the next two slides you have some tips to consider and some links to the Canadian Center for Occupational Health and Safety as to what kind of measures an employer should take when it comes to health and safety requirements. I will not go over those details with you because they're very self-explanatory in the slides and we have also provided you with the links to the Canadian Center for Occupational Health and Safety. Lastly, when it comes to best practices which would be the next slide, please, in line with health and safety best practices for physical workplaces, it is increasingly important to also think about the particular things about remote workplaces. Such as checking in with your remote employees at regular intervals and doing meaningful checking ins. This can ensure that employers are meeting their health and safety obligations, such as ensuring that employees have all the equipment that they need, that their equipment is functioning properly, but it can also assist in maintaining a positive employee morale and positive employee relations for a workforce that sometimes feel invisible or undervalued. You want to connect with your employees and address their needs to ensure that you're retaining talented remote workers, especially in this age of a lack of competition for talent. Lastly, your takeaway is that we strongly recommend that you continue to comply with all of our health and safety obligations, even for remote workers, and there may be some modifications to procedures that are necessary. For instance, remote inspections, video inspections, checklists, however, we recommend maintaining all the same processes, modified appropriately for remote as if in the physical office space and, similarly, we want compliance with work place harassment and violence provisions, that also remains very important.

So the next topic that we want to cover, and we will get into more detail when we go also into the scenarios, is human rights. We have to remember that human rights legislation continues to apply to remote workers and the remote workspace. Given that it's not always easy to see what is going on with remote workers on a day to day basis, fulfilling our obligations under the Human Rights Code might become a little bit more challenging, and again, that's when check-ins become even more important. If you see that a remote worker may be struggling with their mental health in a way that is affecting their work performance, as an employer you may have a duty, you likely have a duty to inquire about this before imposing any negative consequences on the employee, such as discipline. An employer continues to have a duty to accommodate employee code related needs up to the limit known as a undue hardship and this is a limit that is hard to reach. Remember, whether it is in the workplace or in a remote work location, the ultimate goal of accommodation is to help all employees perform the essential duties of their position while having equal opportunities access and benefits. So this may require modifications of whether it is the remote workplace or the physical workplace. Also it may require changes and practices.

In the next slide we have some stats and unfortunately those stats are very concerning. We have a staggering number of the population with mental health issues and, unavoidably, that makes its way to the workplace. So thinking about mental health in the workplace, as human rights accommodation, is very important. In this slide you can see that the number of Canadians with a specific diagnosis of mental health issues has increased in 2020 from 21%25 to 1 in 4 now, to 25%25, which is a big number. The next slide has another stat for you, very similar to the prior one, but it's just to reinforce the point, truly. So let's go to the next slide and think about those human rights considerations when dealing with remote workers.

While remote work can have many advantages some of the disadvantages include that workers may feel burned out where there is a lack of separation between home and work. Workers may be feeling isolated. There is risk of injuries if a home office is not set up properly. It may also be harder to detect if and when an employee needs accommodation and whether the provided accommodation needs any kind of modification, so whether it's working. So open communication with the employees becomes very, very important. While human rights accommodation has to be handled on case by case basis, remote work arrangements may have greater requests for accommodations or those working in remote work arrangements may see a greater request for accommodations on the grounds of family status and disability, especially as the effects of the pandemic continue to be felt. A related point to work from home arrangements, although not always necessarily human rights related, is that many managers are becoming aware of proximity values in the workplace and this has to be something that we stop, that we become aware and we stop. The employees who are working in person may get more visibility with leadership and where bias against remote workers, where that bias there's a factor in there that is related to a human rights protected ground, then it could become a new obstacle and a form of discrimination and obstacle to making workplaces more diverse and inclusive. So this is another aspect to turn your mind to as some employees may work from home permanently while others may choose a hybrid or an even fully in person position.

So, what are our takeaways from our human rights perspective? First, human rights legislation continues to apply, regardless of where the employee is working from. Employers should also consider their duty to inquire, when it comes to remote workers, and the challenges that come with that and inquire about whether the accommodation is working or not and this may not be apparent right away. The second takeaway is to maintain open lines of communication with all remote employees, conduct regular check-ins. This can go a really long way in maintaining morale and understanding the needs of your workforce and, of course, ensure that employees are aware of all the resources, policies and procedures that are applicable despite the fact that they're working remotely. So with this ends the section on occupational health and safety and human rights and I will leave it to Krista to continue to take about privacy considerations.

Krista: Thanks, Melissa. Good morning, everyone. With respect to privacy considerations in remote work, I have two main points. The first one is on the security side so the actual protection of the personal information. As an employer you need to make sure that your employees have adequate safeguards in place in the home office to protect the personal information. This includes the personal information of other employees, as well as customers and clients. Gowling did do a comprehensive webinar on this a bit ago. I've included this link in my slide to the in demand webinar so I would encourage you to check that out if you would like more details on that. The second main point is that you will want to consider in which Province the employees are working and whether there is different privacy legislation that is triggered by that physical location. Three Provinces in Canada have Provincial legislation that is comparable to our Federal privacy legislation. Those Provinces are BC, Alberta and Quebec. So if you have employees working in those Provinces, even through a remote home based setting, that Provincial legislation may govern the personal information collected and processed in that Province. So because of those differing privacy laws across the country, it's important to look at your privacy policy and ensure it covers the Province where your employees are based, as there are slight differences between the comparable Provincial legislation and our Federal legislation. One example of this is a Provincial legislation, so in BC, Alberta and Quebec, governs employee personal information of Provincially regulated businesses. This is different from a Provincially regulated business in a Province outside of BC, Alberta or Quebec, such as in Ontario where PIPEDA would not govern employee information. That is all from me on privacy. Thank you.

Cedric: Thank you, Krista. So I'll continue with some additional Quebec consideration because, as you know, Quebec is a bit different. Our law is based on civil versus common law in the other Provinces so it will raise additional consideration. A question we often receive from our clients is, are the Quebec laws going to apply to my remote employees in Quebec if I'm an Ontario based employer or US based employer? A real important notion here is the notion of establishment. It will vary on a case by case basis depending on which law we're analyzing. Can we go to the next slide, please?

The first one we're going to look at today is the Act Respecting Labour Standards, which is our Employment Standards Act. Provides for overtime, vacation but some very important termination provision, as mentioned by Elisa. There's a distinction in Quebec for without cause termination and we'll have the opportunity to get back to those very important distinction in our fact scenario. But basically our Act Respecting Labour Standards, applies to employees who perform work both in Quebec and outside of Quebec, if the employer has a residence, domicile, undertaking head office or office in Quebec. Now a recent case law has provided some light under what is considered to be an establishment for the Act Respecting Labour Standards. If you have a remote employee and you also have an establishment in Quebec, a traditional establishment I mean, we're talking about a retail location, an office, an address, the Act Respecting Labour Standards will probably apply. But the remote worker's home could also be considered as the establishment of the employer in some situations but not always. If you only have a remote worker in Quebec but you don't have any sales of goods or services in Quebec, or don't have clients in Quebec, we have some recent case law that's saying that it might not be enough to be an establishment, however, if that person that's located in Quebec acts a link for the company in Quebec, for example it's a sales rep that is covering all of Quebec, you have some activity in Quebec, well you might have to dig in deeper because Quebec law might apply for the Act Respecting Labour Standards. Next slide, please.

Another question we often receive is, Workers' Compensation program. What we call the CNESST in Quebec. So basically the Act Respecting Industrial Accidents And Occupational Diseases applies to workers who have an industrial accident, contracting occupational disease in Quebec when the employer has an establishment in Quebec. This notion is different from the previous law that we just analyzed and is required facilities and equipment grouped in a location for production or distribution of goods and services. It's interesting to note that the administrative position of the CNESST, which is the Labour Board, has evolved throughout the pandemic. At the beginning of the pandemic the CNESST did consider that sometime a remote worker's home could be considered as an establishment. Previously the criteria was that person had to have exclusive work space within their home. So if I was working in an office space that was separated from the rest of my home this could have been considered as an establishment. This is no longer the case. So the CNESST just recently changed their position and now the most recent position of the CNESST is that if the only link of the employer is a remote worker's home in Quebec, it might not through your notion of establishment and the necessity to register the Workers' Compensation program. The CNESST will now look at if the employer owns property in Quebec, leases property in Quebec or uses for its benefit facilities in Quebec. So it's less of a grey zone that it was before. But a lot of our clients do still wan to register, voluntarily, which is an option because they want to cover the employees for employment injury in Quebec and it can prevent civil law suits. Next slide, please.

There's also other consideration that should be mentioned. Our civil code of Quebec provides some rules around conflict of jurisdiction, for more general matters, and we have a section basically that says that if the parties agreed on a governing law in their employment agreement, the employee cannot renounce to the public order provision of the State where he actually carries out his activities. So let's say that the governing agreement is based on Ontario law but the employee does 100%25 of his work in Quebec, the employee cannot renounce to the public provision of Quebec law. If there's multiple States in which the employee works, it's going to be the law of where the employer has an establishment which is a residence or a domicile. A similar disposition applies when there's no governing law. So it's going to be a whole jurisdiction that applies to it, if an employee actually carries out his work in Quebec, it's going to be Quebec law that applies and if there's several jurisdictions it's the law of where the employer has a residence or domicile. Also a few important laws that should be considered for remote employees in Quebec and should be analyzed on a case by case basis to evaluate if this applies for your situation. Our Charter of Human Rights and Freedoms, which applies at a Provincial level and does apply to private businesses, provides the right to privacy to employees, protection against discrimination. We also, as Krista mentioned, have privacy legislation so you'll need some form of consent for the use, disclosure, collection of personal information which includes information from clients or information from your employees, and the Charter of the French Language which grants a right to employees in Quebec, they have the right to carry on their work activities in French and this means that for now they have the right to request it. For example, a French version of the employment agreement, but there's also some legislative change that should be monitored for the Charter of the French Language that should come in force soon. It's currently being reviewed by our National Assembly but basically some of the changes could include having to provide a French and an English version of an employment agreement, if it's drafted only by the employer, and then the employee will have the choice to choose between the French and English version of the employment agreement. So these are obligations that should be monitored and you should seek counsel if you believe the Charter of the French Language could apply to your situation. Thank you and with this I'll pass this over to Krista.

Krista: Similar to privacy I have two main considerations to mention for immigration. First, where an employee wants to work outside of Canada, it's critical to consider the country where they will be working from. Each country has its own immigration laws. Some may be more relaxed with respect to working remotely from that country, however, many are not. So for example, Canada and US are not generally relaxed and accept remote work without work authorization. For both Canada and the US there are compliance risks, to both the company and the employee, when working remotely from those countries, even where it's for an employer that is outside of the country. The second consideration is with respect to an individual that requires a work permit to work in Canada. So a foreign national that's in Canada, so this is someone who is not a Canadian Citizen or Permanent Resident in Canada, you need to make sure that their work permit permits them to work remotely. Most work permits are closed in that the work permit is both employer and location specific. So it's not as easy as just permitting remote work for your foreign nationals. You need to look at that work permit and see if it has any flexibility in terms of where that employee is working from. Typically at the time of applying for that work permit, representations are made in terms of where that employee will be working, so you may have to go back to that initial application. It could be that an entirely new work permit is needed before that individual works remotely. That's all from me. Thank you.

Carole: Thank you, Krista. So the next portion of the slides deals with some of the tax issues related to remote working and my colleague, Laura Gheorghiu, and I will be speaking to those tax considerations. The focus of my comments is on the taxation of benefits and the taxation and deductibility of workspace at home expenses. I'll start with the COVID related benefits, because there is an administrative position that CRA has published regarding certain benefits, which are deemed to be non-taxable and this is for the period extending from March 15, 2020 to the end of this current year. According to the administrative position there's certain allowances and certain reimbursed expenses which are deemed to be non-taxable if they're paid in relation to COVID-19. So it includes commuting costs, employer provided parking, computer and home office equipment costs, certain overtime and subsidized meals as well as cell phone and internet service plans. I've provided the link because there are limitations and restrictions in terms of some of these expenses and allowances. For example, the computer and home office equipment costs, it's limited to $500.00 and that's not $500.00 per year. It's $500.00 for that whole period, from 2020 to the end of this year. Best to check the link, the CRA link, for some of the conditions and limitations with respect to some of these benefits. Next slide, please.

If we're talking about post-COVID, assuming there is a post-COVID which we're all hoping for, the general principles with respect to the taxation of benefits and office expenses are as follows: generally all benefits and allowances received or enjoyed by an employee, because of their employment, are taxable. That's just the general rule. There are exceptions to that, however, and one of the exceptions is that if a benefit is primarily for the benefit of the employer, as opposed to the employee, then it may not be taxable to the employee. So the courts have held that where something is provided to an employee, primarily for the benefit of the employer, it will not be a taxable benefit. Any personal enjoyment from that benefit is merely incidental to the business purpose. It is up to the employer to make that determination, as to whether or not a particular benefit that's provided is really for the employer's benefit, more so than the employee. CRA has set out a list of questions that may suggest that the employer is a primary beneficiary of the benefit, and if the answer to any of these questions is positive, then in its view there is a reasonable argument that can be made that the benefit provided by the employer is for the employer's benefit. So does the employer have a business purpose for providing the benefit? Is the benefit required for an employee to perform the employment duties more effectively? Is it required to fulfill a condition of employment? Does the employer have a moral contractual obligation to provide the benefit to ensure the employees are not unduly subject to harm from performing their employment duties? Next slide, please.

Now there are obviously quite a range of different benefits that can be provided to an employee, but because we're dealing with remote workers I focused on two particular ones, namely an allowance that would be received by an employee to cover home office workspace expenses. General rule is that it will be taxable, however, expenses related to home office may be deductible by the employee if the home office satisfies the following criteria, and generally it's the first criteria that's satisfied, namely the workspace of a place where the employee principally performs the duties of employment. Principally means more than 50%25 of the time or the second criteria is the workspace is used exclusively to earn employment income and on a regular and continuous basis for meeting clients or other persons in the ordinary course of performing their employment duties. The second one is less likely to be met by employees in terms of a workspace at home. I'm working from my dining room and I think it'd be hard to argue that the dining room is used exclusively to perform duties, although these days I guess that might be an argument, but you still have to meet clients or other persons at that workspace. So I think for most employees the criteria that will probably be relevant will be the first one, namely that the place where they principally perform their duties. The second benefit I'll speak to is the travel expenses. So if the head office of an employer is a regular place of employment for the employee, travel between the employee's home, including a home office and a head office, is personal travel which means that if the employee is reimbursed for personal travel expenses, that's going to be taxable to the employee. That would cover situations where an employee is working from home under some kind of hybrid policy or agile working policy, which means that they have the flexibility of working from home but they also have either a workstation or a space available at the employer's place of business from which they can work, if they so choose. In those circumstances travel from home to that place of business, head office, whatever, is considered to be personal travel and therefore any allowance or reimbursement of that travel would be taxable to the employee. Next slide, please.

Just going back to the work from home expenses for employees. So this is from the employee's perspective, not from the employer's perspective, and it is COVID related. Many of you will be, I think, familiar with this. So in terms of the deductibility of home office expenses, the government's policy has been extended until December 31, 2022. The conditions are similar as they were in 2020 and 2021. That is the employee must have worked from home 50%25 or more of the time for at least 4 months. An employee is, in terms of claiming a deduction, have two options. They can use the flat rate method which means that they're claiming $2.00 per day, up to a maximum of $500.00 in 2021. Or they can use the detailed method to claim actual expenses but if they choose that method, so if they don't go for the flat rate because they're capped at $500.00 they want to claim actual expenses, then the employer needs to provide form T-2200S. Next slide, please.

In terms of that form, 2200S, if you look it up on the CRA website, it's not very long. It's just one page. It's fairly straightforward, however, in recognition of the fact that employers would have to produce many of these forms for employees who might want to claim not the flat rate but the detailed expenses of their home office, the government introduced this administrative option for employers to allow them, instead of using the CRA form, to develop their own forms, their own electronic forms, and to produce themselves as opposed to use the CRA paper version. It has to mirror the form but it's just to provide more flexibility for employers who have to produce these forms, in some cases, quite a lot of employees. I will pass it over now to Laura.

Laura: Thanks, Carole. When we look at remote working and working from various jurisdictions, our clients are often surprised by the myriad of tax issues that can be raised. They get raised quite quickly. I saw some questions coming in the Q&A. How much time does the person have to be in the other jurisdiction to trigger tax obligations? Really, the answer is it depends. We are addressing here some issues when employees are working remotely from different Provinces and I'm also going to raise some points about working remotely from other countries. But really to get the full picture, if you will have a policy that allows remote work from other countries, you need to get local counsel advice on the tax and employment issues that could be raised because they could be quite varied from one jurisdiction to the next. So breaking it into two parts. Payroll withholding obligations first and then I want to talk about what we call permanent establishment which is basically triggering other kinds of tax obligations.

If you have an employee that is working remotely from another Province, for example, they're living in Quebec but working out of Ontario, you automatically have to think about what is my payroll obligation? Normally, when they're working remotely and there is no establishment in the Province where they live, the payroll is done at the rates applicable in the Province where the payroll department is located. This could be, for example, Ontario. So you would have therefore the difference between the rates at which withholding is made and the rates that the employee actually owes tax at because the employee, my example being resident in Quebec paid out of Ontario, actually owes tax at Quebec rates and there is a difference. It's possible using certain forms Federally, TD-1, to increase the rate of income tax withholding that is done at source so that there isn't as much of a discrepancy for the employee to pay at the end of the year. I always advise clients that in fact it's an advantage to get to keep your money longer, but sometimes employees who are not as aware of the impact may be quite surprised, have already spent it and quite surprised that they have a tax bill at the end of the year. There's also, especially for Quebec, adjustments that need to be made for pension, from CPP to Quebec Pension Plan, and for employment insurance and the Quebec Parental Insurance Plan which is a carve out of employment insurance. Those are all adjustments done on the Quebec return and usually the remittance that is made Federally is then transferred to Quebec but usually it does result in additional amounts owing by the Quebec based employee. There's really no other way to do it. CRA has been asked how else can we adjust for this and they don't have, yet, any policy to make it a bit easier to deal with this scenario that comes up quite often. So if we could just go to the next slide, please.

What happens when the employee is located in another country, how does that work? Well, what happens is that if the employee continues to be resident in Canada, and that's a factual determination, Canadian payroll withholding is still requires so even if they are brought for 3 months working remotely from France, visiting family, there is still Canadian withholding to be done. The only way that ceases is if the employee is truly abroad, ceases being resident in Canada, no longer ever works from Canada and then it's possible to not do Canadian payroll income tax withholding, CPP or EI withholding. But the other problem is that the other jurisdiction will also have a right to do payroll withholding. It's hard to say each jurisdiction, when is that threshold met? From a Canadian perspective, from day one that a non-resident employee works out of Canada, we require withholding. So you'd have to assume that other jurisdictions would have similar rules and you could be offside, unknowingly, from day one that that person is working remotely from that jurisdiction. There's possibilities to obtain waivers in the foreign jurisdiction. Usually, if under the Canada Tax Treaty with that jurisdiction, the employee's actually not subject to income tax. You can get a local waiver. Or sometimes if they stay there long enough to become subject to income tax on that employment income, then you can sometimes get a reduction in Canada on the basis that even though they're still resident in Canada, taxed in Canada on their worldwide income, they would actually get a foreign tax credit for the tax paid in France, in my example, and so we would reduce it. If you do nothing what happens is that you will have double withholding and a lot less money in the pocket of the employee at the end of the period. Also for social security contributions in the country, it's possible to get a certificate of coverage to show that the employee is still covered and paying into a Canada pension plan. The problem is that the governing rules, and not all countries have agreements with Canada, you have to check. There's about 50 countries that do. The agreement usually provides for scenarios where the employer has sent the employee abroad. Not where the employee goes of his own accord. So it might not be as easy to put this in place, especially if they're working from a number of jurisdictions. So that's another point to keep in mind. If we just switch now, gears, next slide, please.

So I talked about payroll but there's also, as I said, a whole other scope of income tax issues that you could raise. We call this, from an establishment consideration, it's really about creating enough of a presence or a nexus in the location to trigger other tax rules. In a Canadian perspective, if the employee's working from another Province, then we could trigger income tax obligations if that employee creates an establishment in that other jurisdiction. What does that mean? It means that the employer would have to file a tax return in that Province and they would have to allocate part of its gross revenue to that Province based on a formula. So when can you have an establishment created? Normally it's a fixed place of business. Something physical. An office, a factory, a warehouse in certain circumstances. But you could also create an establishment if the employee is having the general authority to contract on behalf of the employer. So you have to see what kind of employee are you having to work remotely. Quebec has some additional rules that you have to be aware of. Sometimes having real property in Quebec can trigger an establishment or certain insurance corporations with permits in Quebec could trigger establishments. What kind of level of control does the employee need to have? Usually if they have the ability to bind the company. For example, they can accept a contract without having to get permission from a head office, that's usually enough to create a permanent establishment in a Province. But if they have to always go back and get permission it's probably okay. So really have to be careful there. The other thing to be careful about is that when you have a permanent establishment, other tax can follow. So for example, the payroll withholding obligation in Quebec is only triggered if the employer has a permanent establishment and the employee is working from that establishment or paid from that establishment. So in my example at the beginning, the individual who is working remotely from Quebec and paid out of Ontario, that's fine but if all of sudden we create an establishment in Quebec then the question is, do we need to do payroll at Quebec rates? The other point that often gets missed, and really needs to be flagged, is that an employee working in a Province can create enough of a presence to trigger a requirement to register for sales tax and collect sales tax on the sales into that Province. So that's a big deal because the failure to withhold sales tax can really add up quickly and it's not something that people who are dealing with employees, remote workers, would be flagging necessarily to their tax department.

I just want to give a couple more comments on the next slide. What happens if that employee is working from another country? So here we talked about establishment and I'm going to bring in tax treaties, really quickly. If somebody works from abroad they can create an income tax obligation for their employer in that country. Depending on the rules of that country. So it's possible that if there's no treaty, tax treaty, with that country the mere presence of that employee, in certain circumstances, that country can all of a sudden make the Canadian employer subject to income tax in that country, or at least maybe some tax filing obligations. If there's a treaty, the threshold goes to having that current establishment that I talked about. There's different definitions in each treaty but they all include this concept of an employee who has the right to contract on behalf of his employer. Some of them have rules about services. So if the employee is rendering services to a customer that happens to be in that country for more than 183 days in the year, you can create what we call a service payee. This is not in all treaties but in Canada/US, for example, We have this rule. So now you have to ask yourselves, what kind of projects does this employee work on and put some of our customers projects that this employee works on, could those customers be located in the jurisdiction where the employee is going to be working remotely? There's other rules. Again, we talked about payroll tax. You have to look at the local payroll withholding tax obligations. There could also be withholding on service fees paid, with respect to services rendered in that country. So a lot of tax issues come up quite quickly. So that's it for tax and I'm going to turn it over now to go to the fact scenarios.

Elisa: Thank you, Laura. Thank you, everyone. So now we start part 2 of our webinar which was the fact scenarios, where we're going to apply some of what you heard during the first part to some actual scenarios. So we're going to start with fact scenario number 1. Company ABC has it headquarters in Ottawa. They hire John to work remotely from British Columbia. He's a VP of Operations. He signs their standard executive employment agreement which is based on Ontario law. ABC doesn't have an office in BC and John is going to ordinarily perform his work from his home in BC. His job involves managing employees that are working out of the Ontario office, dealing with clients based in Ontario. He's handling confidential information, including some personal information regarding clients and suppliers. While John primarily works out of BC, that's where he performs most of his work, because he's a member of the management team he has to attend in person meetings from time to time, on the last Thursday of every month, at the headquarters in Ontario. So there is some travel to Ontario. Again, ABC does not have operations in BC so all of their current policies are based on Ontario laws. Employment standards, privacy, etcetera. Next slide, please.

So first I'll ask Melissa. Based on that fact scenario, would Ontario or British Columbia employment standards law apply? Maybe we could just go back to the fact scenario just so that everybody can see the facts again.

Melissa: Okay, generally, because the employee will ordinarily work and reside in BC, BC employment standards would likely apply. However, we still have to consider whether the fact that the employee will be required to attend the Ontario office on a monthly basis, constitutes work performed in Ontario for the purposes of the Ontario ESA. For this we have our case that is fairly on point from the Labour Relations Board of Ontario. It's called ... and valor. I will send the citation on the Q&A. It deals with this issue. Here the Board considered whether the ESA applied to an employee who performed almost all of his work in the US, for an employer with headquarters in Ontario. The employment contract, and here's where we answer some of the questions that have been coming on the Q&A, the employment contract said that the parties wanted the laws of Ontario, including the ESA, to apply, however, the employee was based in Michigan where he performed almost all of his work, even the work that related to clients based in Ontario. He came to Ontario on a few occasions in this case to attend meetings but the Labour Board determined that this was incidental to his work in Michigan and constituted a continuation of his work outside of Ontario. The Board gave very little weight to the intention of the parties and we find that this is the case across the board with adjudicators. They give little weight to the intention of the parties and found that the ESA did not apply because section 3(1)(b) of the ESA was not applicable. So based on this, we really need to look at any potential enforceability issues that may come up with an employment agreement, and with employment policies, if they do not meet minimum BC employment standards.

Elisa: Thank you, Melissa. Krista, over to you. Do you see any privacy concerns that we should be addressing?

Krista: Sure, yeah. So because he is working remotely from BC this would be a case where BC's privacy legislation, so PIPA, may apply and would likely apply, if there's any processing of personal information as part of his job. So the company would need to ensure that they're complying with the privacy legislation in BC. So they would want to review their privacy policy and also have a discussion with John about his responsibilities under PIPA, due to his remote work there.

Elisa: Thank you. Now, tax. Tax is always a complicated issue. Do we see any tax issues in this scenario, Carole?

Carole: From a tax perspective, I guess Laura and I can share this, but from a tax perspective I'll comment on the travel by John from his workplace in BC to Ontario, on a monthly basis. In terms of any reimbursement of those expenses by the employer, it's unlikely that that would be a taxable benefit, taxable employment benefit, to John because there's a reasonable argument that can be made in those circumstances. The circumstances of this fact scenario, that when John travels to Ontario to attend monthly in person meetings, that he is doing so mainly for the benefit of the employer and not so much for his personal benefit. So that is something in terms of a travel expense that could be paid by the employer without triggering income tax. Laura, did you want to speak to the source deduction issue?

Laura: So if I'm not mistaken in this case, he works in BC but he's being paid out of Ontario, so normally would be at Ontario rates that the withholding would be done.

Elisa: Is there any risk with respect to permanent establishment since John is working in BC and his role is VP Operations?

Carole: There could be. It doesn't really provide information regarding the type of work that he does. It could to the extent that he has the ability to bind his employer by contract, or contract on behalf of his employer. Outside of that it's unlikely that his presence in BC would trigger a permanent establishment issue for the employer.

Elisa: Thank you. Next slide. Actually two slides, please. So from this scenario some best practices to offer you. You should always carefully review the circumstances to determine the applicable laws. Employment and privacy. Review your employment agreement to ensure that it's governed by applicable law, complies with minimum employment standards. Similarly your work policies. You want to make sure that there's no potential violation in your work policies. So if your work policies are Ontario based you might need to look at whether you're going to adjust them and how you're going to adjust them to ensure that it encapsulated all of the employment laws that might be applicable. Similarly your privacy policy. Look at your privacy policy. Look to see whether that needs to be updated. Ensure your employee's legally permitted to work in the other jurisdiction. If you allow the employee to work remotely in a jurisdiction where the company doesn't have physical premises, consider the potential deemed establishment risk and, as Carole mentioned in terms of the travel expenses, if the employee's required to pay for their own travel expenses from their remote workplace, which is in another jurisdiction, when they travel to your headquarters ensure that the employment contract is clear that the employee is required to work remotely and they are required to pay for their own travelling expenses. Right. Next scenario, please.

The next scenario involves Mary. She also works for ABC as a salesperson. Although Mary worked at Ottawa headquarters prior to pandemic, during the pandemic all employees were working remotely. ABC gave their employees an option to continue working remotely. Mary decided she would continue to work remotely and she actually hasn't been to headquarters since the initial shutdown in March of 2020. Mary has a four-season cottage on Lac-Sainte-Marie in Quebec. She's been working at her cottage 50%25 of the time since March of 2020, unbeknownst to her manager. In January of 2022 she decided to sell her home and live at her cottage full-time. Recently Mary's relationship with her manager has become strained and a decision has been made to terminate Mary's employment. ABC terminates Mary's employment and provides her with minimum ESA entitlement, pursuant to Mary's contract. Mary's cousin is a lawyer and tells her that she should file a claim under Quebec laws. So, this is a question for Cedric. Does Mary have a valid claim that Quebec laws apply?

Cedric: Thank you, Elisa, and perhaps just to start with the difference between Quebec law and employment and Ontario termination of employment. We have some great differences in Quebec. First of all you cannot terminate an employee without cause, if the employee has more than 2 years of seniority and is not a senior manager. If you're doing ... you can request reinstatement in the position and backpay until the trial. The other consideration is reasonable notice of termination. So when you're terminating an employee without cause, based on the civil code of Quebec, is entitled to a reasonable notice of termination which can be in time or pay in year. That will vary based on the seniority, salary position of the employee. I believe in common law Provinces there's a way to carve out those kind of reasonable notice of termination but you cannot do so under civil law. So it's really important to know which law will apply. As we've seen for employment standards, which is the Act Respecting Labour Standards, we'll need to establish does ABC has an establishment in Quebec. If there is an office, a store, an address of the employee in Quebec, they might have an establishment in Quebec and Quebec law will apply to the remote worker. But even if the employee does not have an address in Quebec, we've seen that Mary's remote home could be considered as the establishment in Quebec. We'll have to assess does the employee have activities in Quebec? Does she offer services in Quebec or goods? Does she have clients in Quebec? If so Mary's remote home could, under certain circumstances, be considered as the establishment of the employer in Quebec and the Act Respecting Labour Standards and the reinstatement recourse that I just explained, might apply. The other thing that we have to consider is the reasonable notice of termination and then we have to consider the rules of the civil code of Quebec, which provides that an employee cannot be deprived of the mandatory rules of the law of the State where the worker actually carries out his work. So if Mary's working 100%25 of the time in Quebec, Quebec will be the jurisdiction where she actually carries out her work and she cannot be deprived of mandatory rules of Quebec, and thus she will be probably entitled to the reasonable notice of termination. This is why having clear rules about where an employee can work in your employment agreement, or in your remote policy, remote working agreement, are very important. If Mary would work 50%25 of the time in Quebec that's a different question because as she's actually carrying out her work in Quebec, but we could also say that she's actually carrying out her work in another jurisdiction. In that fact scenario is the jurisdiction where the employer has a domicile or a residence that would apply. So if Mary is splitting her time between Quebec and another jurisdiction, well that employer could have an argument to say that another jurisdiction law do apply. Unfortunately, as remote work is a new practice, we do not have case law on this and we don't have the final argument of the courts on whether it's a percentage based analysis or a quantitive based analysis, but we will have to examine the case on the future to determine the strength of that argument.

Elisa: Thank you, Cedric. Could you advance the slide? Thank you. So in this scenario one of the biggest issues was that Mary chose to work remotely from another jurisdiction without letting her employer know that. That, we've seen through the pandemic, has been a bit of a problem. So as a best practice, we do recommend implementing a remote work agreement or a policy that clearly stipulates that the remote work location is the employee's residence and expressly provides that permission is needed to work in a location that is somewhere other than the employee's residence, and if they make a request that you retain, as the employer, the discretion as to whether or not to grant that permission and also a provision that provides that if they do work from a different location that has not been approved, then there could be consequences to that which would be potentially the termination of the remote work arrangement or the employee's employment. Finally, if the employer has that opportunity to grant the permission to the employee, then that will give them the chance to put proper terms in place, and conditions in place, that will apply to continued employment from whatever that other jurisdiction may be, such as Quebec, and ensure that they're compliant with Quebec laws. Next slide, please.

Scenario number 3. Jane has been working from home since the beginning of the pandemic and, like Mary, she's continued working from home on a full-time basis. Jane's husband has been offered a job in New York. She tells her manager, I'm moving to New York and I'll continue to work remotely from New York. ABC advises Jane, you can't work from New York. You have to come back and work from our offices. Jane takes the position that she has the right to work remotely. She questioned why she can't work remotely from New York when she's working remotely 100%25 of the time. What does it matter? ABC refuses to allow Jane to work remotely from New York, because there are complicated tax and immigration issues and they take the position that if you go to New York, then we're going to treat your employment as having been terminated. We're going to treat you as having resigned. So. First question for I believe, Laura. What are the tax considerations for ABC if they were to permit Jane to work remotely from New York?

Laura: Yeah, Elisa, that's a really good question because we hear quite often such a small request, can I just work remotely, not from here but from over there across the border? What's the problem? The issue is that it does trigger payroll and income tax obligations in the other jurisdictions. So here in the US, we don't know exactly how long he's going to be working remotely. Is this a permanent move or just something for a few months? But normally US payroll would apply and we might still have Canadian payroll applying. So how do we deal with that double withholding? When we have employee that is sent by the employer abroad for a specific project, we ahead of time address that either through waivers in one of the jurisdictions, or sometimes we'll just gross up the salary to make sure that after all the withholdings are down that employee is getting the same in hand amount after taxes. In this case we wouldn't be doing that because it's not at our request that they're working remotely. So that's one issue. The other being, obviously as we mentioned before, does she trigger income tax in the other jurisdiction? What kind of work is she doing for the company? Is she is a salesperson? Somebody who can enter into contracts on behalf of the company? Is she triggering withholding taxes on any service fees for projects done out of that country in which she's going to be working? Another question that we don't think of often, and going back to kind of tax minefields that we're navigating, is that maybe we're triggering a requirement to register for sales taxes in New York State and start collecting those on any services or goods, especially, that we'd be selling into that State. So all of a sudden one small move by her is creating a lot of headaches for the tax department.

Elisa: Thank you, Laura. Very complex issues. How about immigration, Krista? Any immigration issues here?

Krista: Yes, there are. So she would likely need work authorization prior to working from New York, even though she will continue to work for the Canadian company, and it could be that there are ways to obtain that work authorization for her, especially if her partner is authorized to work in the US. But the bottom line is that that still needs to be applied for and obtained before she starts working in the US.

Elisa: Thank you. That makes sense. Now from an employment perspective, does ABC have the right to require Jane to return to the office to work from there since she'd been working remotely?

Melissa: Well, hopefully, and the reason I say that is because we have to start with looking at the employment agreement. We need to see what, if anything, it says about work location. We need to see if there was an amendment to the agreement when the pandemic started. We need to see if ABC created a defined right to work remotely. Depending on the language of the contract, did ABC specify where the remote work location should be or does it say that you need permission to work somewhere else? They might have obviously a valid basis to refuse her working from New York but if she has been working remotely and ABC has not indicated that this is only temporary, requiring her to return to work from the office could potentially amount to a constructive dismissal.

Elisa: Right. What about ABC's threat that if she does leave to work from New York that they'll view that as a resignation?

Melissa: Well, most likely they would not be allowed to consider this a resignation. I think it's better if we want the route, again depending on what's said in the contract, but most likely we may want to go the route of termination and then we'll have to determine whether we're doing termination for cause, with perhaps clear warnings that she's not to go work in New York. Now that doesn't mean that that would actually be considered cause. Perhaps we want to go the frustration of contract route. We want to start a record, as I mentioned, with those clear warnings and if she breaches then we will terminate. Honestly, if we have a valid ESA only contract we're likely best to terminate without cause. How we approach this will also depend in part on the contract and whether it specified a work location is to be in Ontario, and subject to approval, and whether we want to take a hard line or not.

Elisa: Right. So some of the best practices here, if we could just move to the next slide, would be to have a clear term, whether it's in an employment contract, remote work agreement or remote work policy, where it's clear that the remote work arrangement is not a right but rather a privilege and the employer may terminate that remote work arrangement and require the employee to work primarily, and exclusively, from the office. In this case the employer probably should have, before they shifted to that indefinite term arrangement from the temporary COVID remote work arrangement, put those terms into place. As noted in the previous scenario, the policy should specify where the remote location is and that the employee needs to obtain permission if they want to change that remote work location. US immigration laws need to be considered. As Krista noted, the employee would need to obtain a work authorization for the US and, as we know, tax issues are complicated and could be costly so consult your tax lawyer.

So next scenario. ABC is recruiting for a VP Sales and although they do not have any offices in Toronto, they're expanding their search for candidates outside Ottawa Gatineau Region. Mark lives in Toronto. He's hired by ABC for this VP of Sales role. He's working remotely on a full-time basis. He's young and single. Loves to surf so he decides he's going to move to Costa Rica. He's not sure whether his manager will approve so he doesn't tell her. He makes sure he keeps the same work hours based on the Eastern time zones, sets up a virtual background during Zoom meetings and travels as needed to the office for meetings. Mark's manager noticed he's starting to look a little tanned but doesn't ask any questions. Mark is loving surf for life and it starts to impact his performance. His manager decides to terminate his employment. After giving Mark notice of termination and a severance package, Mark's manager learns that he's being working from Costa Rica for the last one and a half years. So, from an employment perspective, Melissa, in this scenario do you think the laws of Ontario would continue to govern or are we in risky territory where the laws of Costa Rica might apply?

Melissa: I think we're in very, very risky territory and with the laws of Costa Rica, blind, which as it's my understanding in South America and in Europe, those laws are very employee friendly. A lot more employee friendly than even in Ontario. So we really need language in our contracts that approval to work elsewhere has to be sought in advance and we should probably limit approval to very, very temporary things. A few weeks on vacation. I'd love to go live in Costa Rica but if I'm working there for 2, 3 weeks that would probably still keep me under Ontario law but there is no hard and fast rule, as I mentioned before in one of the answers as to the time limit, but if we're going to put language in our contracts of approval and limit approval to temporary things then we can rely on the law to terminate for willful misconduct, and cross our fingers that this will help us even if he starts an action in Costa Rica.

Elisa: Thank you. Now, certainly this is going to potentially raise issues from a tax perspective, I believe, Laura.

Laura: Yeah, that's right. We saw this a lot in the last 2 years where employees decided to work from other countries, without telling anybody, and after the fact we find out that they've been there for a while. Payroll withholding is triggered in Costa Rica probably, especially after such a long time of being there, on top of what was done with payroll withholdings in Canada. So that will be a cost to the employer, may or may not be able to recover depending on what the local laws provide in terms of recovery. Again, Costa Rica doesn't have a tax treaty with Canada so his mere presence, even if he's not a sales person, could trigger some sort of income tax obligations, maybe sales tax obligations. You would need to speak to a local tax professional to get complete advice and then figure out how you can resolve, whether there's a way to come clean in a volunteer disclosure depending on how much the amounts could be, or just pay them and resolve that way.

Elisa: Okay. What about immigration? I expect that there might be some issues after living in Costa Rica for a year and a half.

Krista: Yeah, yeah. That's right. ABC needs to consult an immigration lawyer in Costa Rica to confirm whether there's an issue with Mark working from that country.

Elisa: Presumably there would be, we're not giving advice on Costa Rica law obviously, but there would be some requirement, potentially, for some work permit?

Krista: There could be. Yeah, I'm not sure what the immigration laws are in Costa Rica. So yeah, they should definitely retain someone locally to confirm.

Elisa: Alright. Next slide, please. So from this scenario what did we learn? Again, I sound like a broken record, but it's critically important that the employee understands what the parameters are around the work location. I don't know if it would have even stopped this employee in this particular case. He might have gone to Costa Rica anyway, but I think it's helpful to have those provisions in your agreement or policy and have a provision that says, if you're lying about where your remote work location is, that is a serious violation and could lead to severe discipline, up to termination of your employment. Again, always consider the laws of the remote location, that is outside of Canada including whether work authorization is required, despite the fact that your company may be a Canadian company. Again, tax issues are complex and could be costly so consult your tax lawyer.

Laura: Yeah, and having those policies that specifically say you're not allowed to work remotely without letting us know and verifying on that can help also with penalties. At least you could say we've done our best. We couldn't do more.

Elisa: Perfect. Alright. Moving onto the next scenario. ABC's travel policy states that employees are reimbursed for costs incurred for travel, except for regular travel to and from their home and the workplace. They also have a policy that states working hours includes time spent travelling from work but it excludes the time you spend travelling between your home and the workplace. Frank works fully remotely but is required to travel to ABC's headquarters for regular team meetings. Frank moved during the pandemic and his commute to the office is now 1 hour each way. Frank gets paid on an hourly basis and submits his travel time for travelling to the workplace for meetings and submits an expense claim for the travel. So, Melissa, now that the workplace is technically his home does Frank have appropriate claims for travel time and for costs of travel?

Melissa: Well remote working contracts, again, should make it clear that the employee may be required to attend head office, or may be required to attend specific office locations as requested at the discretion of the employer, or whatever language we can use there. So if we have that we would argue that they have two workplaces; home and the office. We would then argue that the travel to attend office meetings is not working hours under the ESA but instead it is commuting time. We have not come across any decisions thus far that deal with this issue in all jurisdictions, not just Ontario. But from an ESA perspective, commuting time for an employee who has a usual workplace means the time required for the employee to travel to their usual workplace from home, and vice versa. In situations where an employee does have a usual workplace but is required to travel to a location other than the usual workplace from work, that's when all time spent travelling to and from that location is considered working time, rather than commuting time. So we need to make sure our contracts are very clear so that we don't fall in a situation where we are paying for commuting time.

Elisa: An employer can have a policy that separates out remote workers and deals with travel expenses and travel costs for those remote workers.

Melissa: Absolutely. Ultimately, expenses is not something covered by the ESA, so it's a matter of policy.

Elisa: Right. So we could advance to the next slide, best practices, please? So in this scenario what this highlights is to review your policies. Now that you have remote workers, and either you might want to have different policies applying or you might need to add some clarity to those policies, to address situations that may arise as a result of your remote work. Also, review applicable Provincial legislation to ensure that you're compliant with minimum requirements, including hours of work.

Okay, our final scenario that we're going to try to squeeze in before we conclude today. ABC employees were working remotely during the pandemic. They were being pretty flexible. They let their employees take care of the children because daycares were closed. They didn't really impose any obligations on having a formal proper workspace. During the pandemic, Francesca was given a lot of flexibility. She had varied hours. She was taking care of her 2 year old. Once ABC opened its offices, given the nature of Francesca's position, they asked her to come to the office 3 days a week. She asked if she could continue working fully remote because her daycare had closed down. She had made a really good effort to look for other daycare but she didn't have any. She also noted that she had been working from her kitchen table throughout the whole pandemic, developed a medical issue and her doctor was suggesting that she use a stand-up desk. Francesca already had a stand-up desk at the office. So, this scenario raises a couple of questions. Can ABC refuse the request to work 100%25 remote or does Francesca's request give rise to a duty to accommodate? Melissa.

Melissa: We have to engage in the accommodation analysis. We have to determine what the family status related needs are, meaning legitimate needs versus the employee's preferences. Preferences do not need to be accommodated under Human Rights legislation, only needs. In Ontario, while we know that the self-help approach is not necessarily something that can be expected and family status situation, because this test is also the same for all protected grounds. ABC will have to make an assessment of the reasons why an employee can't come into work and then also find out whether that employee has participated in the effort to find a solution. Meaning in the duty to cooperate in the accommodation process and whether we're dealing with an actual need. Part of our process can be to point to her all of the different options that are available in the area for childcare. Ask her whether she has made any efforts to find alternative solutions and ultimately she needs to perform the essential duties of the position. Now with respect to this, there's a recent case, pre-COVID 19, in Ontario. A Court of Appeal decision that confirms that while employees may need to adjust their work hours because of issues such as childcare. In that case it wasn't the pandemic but in this case it would be changes with the pandemic. The employer's flexibility in granting those requests does not always modify the underlying employment contract. In that case, which I will share the quote is, paternal custom granite and marble, the Tribunal found that it was not a violation of the code when the employer insisted on the employee returning to an 8:30am start time as opposed to 10:00am. That was also to deal with childcare obligations.

Elisa: What about the request for the stand-up desk to use in her home?

Melissa: So, accommodation is at the employer's expense and there are obligations beyond the Code also to ensure a health and safe work environment. So here we might be dealing with two things. We might be dealing with an accommodation under the Human Rights Code and an obligation under the Occupational Health and Safety Act. Ergonomics for home workstation will matter with respect to that. There will certainly be the issue of whether we can insist on working from the office as opposed to remotely, but if working remotely is part of the employment agreement or as part of the accommodation that we need to implement, then the accommodation that applies in an in-person office will also apply to a remote workplace.

Elisa: What about our request for a stand-up desk? I mean there's other alternatives that may be available. Can they choose to provide that other alternative that might be less expensive?

Melissa: 100%25. So the employee is entitled to reasonable accommodation but the employee is not entitled to the perfect accommodation. Often they might look for the perfect one but if there are other alternatives that meets the employee's restrictions and limitations, then that's fine.

Elisa: Perfect. Okay, moving onto the last slide. So just to remind everyone, the duty to accommodate does arise whether a person works remote or in person so if you have a request that is an accommodation request, you should follow the same process as you would with someone that was working in your office. Have a meaningful conversation to understand what the needs are. Document your discussions and consult your counsel before making decisions about recommendations or accommodations. Also, don't forget that the remote workplace, you should take steps to ensure that it's a health and safe remote workplace and complies with the Occupational Health and Safety. What we were doing during pandemic, allowing people to work from random office spaces is maybe not something that you're going to want to do if you're implementing remote work on a more permanent basis.

So that concludes our webinar today. I thank all of our speakers for their insight. I hope everyone found it informative. We will be hosting our next webinar on May 18. It will be on Bill 88, the Working for Workers Act legislation. We hope that you can join us at our next webinar and I wish everyone a wonderful day.