Business Law Corporations

Carrying on a Business

• A business can be carried on in three ways: sole proprietorships, partnerships, and corporations

Sole Proprietorships

• An individual carries on business on their own account, without the involvement of other individuals except as employees
• The sole proprietor is responsible for all business obligations, including losses and contractual and tortious liability
• Business losses can be used to offset personal income

Partnerships

• Partnerships are two or more persons carrying on business in common with a view to profit
• A partnership agreement governs the allocation of income, losses, and capital gains/losses
• In the absence of a partnership agreement, the Partnership Act provides default provisions
• Partnerships can be dissolved by expiration of a fixed term, notice of intention to dissolve, or the death or insolvency of a partner

Limited Partnerships

• Comprised of one or more general partners and one or more limited partners
• Limited partners have limited liability and share in profits of the limited partnership
• On dissolution, creditors are paid first, then limited partners in respect of their profits and contributions

Limited Liability Partnerships (LLPs)

• Partners are not personally liable for debts and liabilities of the LLP
• Judgments against LLPs for tortious liability will not be enforceable against the personal assets of partners
• To carry on business in Ontario, the LLP must be registered under the Business Names Act and maintain liability insurance

Corporations

• A corporation is a separate legal entity that can own property, carry on business, and incur liabilities separate from its shareholders
• Shareholders do not own the corporation's property and their liability is limited to the value of their shares
• Corporate dissolution occurs when the corporation's existence is terminated

Privacy Laws in the Private Sector

• The Federal Personal Information Protection and Electronic Documents Act (PIPEDA) sets out how organizations can handle personal information
• There are 10 principles that organizations must comply with, including accountability, identifying purpose, consent, and limitation of use, disclosure, and retention
• Organizations must designate individuals responsible for compliance and establish procedures to handle inquiries and complaints

Enforcement and Administration of PIPEDA

• The Privacy Commissioner oversees the enforcement and administration of PIPEDA
• Individuals can make complaints to the Commissioner about an organization's personal information practices
• The Commissioner can investigate and find an organization in contravention of PIPEDA, and grant remedies including orders and damages

The Employer-Employee Relationship

• The employment contract is subject to contract law and statutory minimums
• Employees have implied obligations, including obedience, attendance, competence, good faith, and confidentiality
• Fiduciary employees have additional obligations, including avoiding conflicts of interest and acting in the employer's best interest

Employer Obligations

• Employers have fundamental obligations, including providing work and pay, and a safe work environment
• The Ontario Occupational Health and Safety Act requires employers to provide a safe work environment and guarantees employees the right to refuse unsafe work### Employer Obligations
• Establish a joint employer-employee committee pursuant to the Occupational Health and Safety Act
• Provide notice of termination, which must be “reasonable” based on factors such as length and character of employment, and availability of alternate employment
• Probationary employees can be dismissed during the applicable probationary period if the employer acts in good faith, based on a reasonable, honest, and fair assessment of the employee's suitability

The Employment Standards Act (ESA)

• Establishes the minimum statutory employment standards for unionized and non-unionized employees in Ontario
• Covers payment of wages and minimum wage, hours of work and break periods, overtime pay, public statutory holidays, vacation pay, and leaves of absence, and termination and severance of employment
• Does not apply to employers and employees governed by the Canada Labour Code (CLC)

Ontario Human Rights Code (OHRC)

• Expressly prohibits employment-related discrimination and harassment on the basis of race, ancestry, place of origin, color, ethnic origin, citizenship, sexual orientation, gender identity, gender expression, etc.
• Employers have a duty to take reasonable steps to investigate and address allegations of workplace discrimination or harassment
• The employee alleging the human rights violation has the initial burden of establishing a prima facie case of discrimination

Termination of the Employment Relationship

• An employer can terminate the employment relationship without notice for serious misconduct, breach of duty, or incompetence
• Must provide reasonable notice or termination pay, which is determined by factors such as the character of employment, length of service, age, and availability of similar employment
• Constructive dismissal occurs when an employer unilaterally makes a fundamental change to the employment contract, and the employee may claim damages in lieu of notice

Employee Remedies

• Common law - wrongful dismissal, where the employee has a civil right of action against the employer for wrongful dismissal
• Canadian Labour Code - unjust dismissal, where non-union employees in non-management positions can file a complaint with the Minister of Labour
• Employment Standards Act, s.96 - employees can file a complaint with the Ministry of Labour if they believe their employer has contravened or is contravening the ESA

Union Certification Process

• Certification application by the Union, where the Union must demonstrate that it has the support of more than 40% of employees in the proposed bargaining unit
• Response by the employer, where the employer must file a response, including a list of all employees in the proposed bargaining unit, and its position on various legal issues
• Representation vote, where the Union must obtain the support of more than 50% of employees in the proposed bargaining unit

Labour Law

• When a Union can make a Certification Application, which is when the Union proposes an "appropriate bargaining unit" and has the support of more than 40% of employees in the unit
• "1 year bar" on unsuccessful Certification Applications

Collective Bargaining

• Once certified, a Union has exclusive bargaining rights for the employee unit, and the OLRA places an obligation on the Union and the employer to meet and bargain in good faith
• The Union and the employer must bargain collectively, and a Collective Agreement (CA) is negotiated, which includes wages, benefits, and working conditions

Collective Agreement

• A CA must provide for final and binding settlement by arbitration, without work stoppage, of all differences between the parties arising from the interpretation, application, administration, and alleged violation of the CA
• An arbitrator has the authority to determine its own processes, and is also empowered to interpret human rights and other employment-related statutes

Unfair Labour Practices

• The OLRA prohibits any Union, employer, or person acting on their behalf from discriminating against an employee on the basis of their support for a Union, or that the employee exercised a right under the OLRA
• If an allegation of an unfair labour practice is made, the OLRB will hold a hearing to determine the matter
• The OLRB has broad remedial powers, including declaration of a breach, rescission of any discipline unlawfully issued, and reinstatement### Labour Relations
• If bargaining comes to an impasse, either party may apply to the Minister of Labour to appoint a Conciliation Officer to assist in reaching a Collective Agreement (s.18)
• If the Conciliation Officer is unsuccessful, the Minister may appoint a Board of Conciliation or issue a "No Board Report"
• A Union may lawfully strike or an employer may lawfully lockout at 12:01 am on the 17th day from the issuance of a "No Board Report"

Business Immigration

• Immigration issues with respect to hiring foreign workers, transferring employees within a company from one country to another, and facilitating entry of foreign nationals for business purposes
• Application procedures and eligibility criteria for various entry and immigration programs are constantly changing
• Lawyers advising must understand which laws, regulations, and Ministerial instructions are applicable to the issue at hand, and which governmental departments are engaged

Temporary Foreign Workers

• IRPR s.186 sets out when a foreign national may work in Canada without a work permit
• Work permit exemption for "business visitors" may be useful in bringing foreign nationals to Canada for a period < 6 months
• Foreign nationals from countries that are NOT exempt from obtaining a temporary visa must still apply for and obtain a temporary resident visa prior to entering Canada as a "business visitor"
• If a business client requires the services of a foreign national for a period > 6 months, they will need to obtain a work permit in order to work in Canada

Obtaining a Work Permit

• In order to obtain authorization to hire foreign nationals to work in Canada for a period > 6 months, an employer business must:
  • Apply for a Labour Market Impact Assessment (LMIA) from Service Canada
  • Provide detailed information regarding the position being offered (i.e. duties, salary, benefits, hours, duration, etc.)
  • Provide proof of efforts to recruit Canadians or permanent residents
• Employers must submit a new LMIA application to Service Canada if it substantially changes the job duties, salary, or location of employment

Exemptions to the LMIA Requirement

• Exemptions to the LMIA requirement include:
  • Foreign workers covered under international agreements, including:
    • Professionals listed in NAFTA Appendix 1603.D.1, employed 1+ years in a managerial or specialized-knowledge capacity
    • Traders and investors

Permanent Foreign Workers

• In order to obtain permanent residence under the "economic class" stream, the foreign worker must demonstrate that they will be able to become economically established in Canada (IRPA s.12(2))
• Part 6 of the IRPR sets out the criteria for the permanent residence "economic classes", including:
  • Foreign Skilled Workers Program (IRPR s.75)
  • Provincial Nominee Program (PNP) (IRPR s.87)
  • Canadian Experience Class (IRPR s.87.1)

IRPA Admissibility Issues

• In addition to meeting all the qualifications for the economic class and/or program they are applying under, foreign nationals applying for temporary or permanent residence applications must ALSO demonstrate that they meet all of Canada's admissibility requirements
• Admissibility issues include:
  • Medical (IRPA s.38)
  • Criminal (IRPA ss.36-37)
  • Misrepresentation (IRPA s.40)
  • Non-compliance (IRPA s.41)

Corporations

• A corporation is a separate legal entity from its owners (i.e. shareholders), and the rights and liabilities of the corporation are separate from those of shareholders
• Corporations can own property, carry on business, incur liabilities, and possess rights (i.e. enter into contracts, sue and be sued) in its own name
• Corporate dissolution may only occur where:
  • The requisite number of shareholders resolve that it should
  • A court orders that the corporation be dissolved
  • It is deemed to be inactive pursuant to a statute or has breached certain provisions