mining seminar april 2015
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Mining seminar
Restructuring the workforce
April 15, 2015
1
Jillian E. Frank, Partner
Labour & Employment Practice Group
Restructuring the Workforce
April 15, 2015 2
1. Amending Employment Contracts and Constructive
Dismissal
2. Contracting Out and Successorship
3. Downsizing and Termination Obligations
4. Adjustment Plans
5. Liability for Unpaid Wages
Outline
Restructuring the Workforce
April 15, 2015 3
• What does the Employment Agreement say?
• Issues to consider:
• Consideration for changing the employment agreement
• Constructive dismissal for changes that are fundamental to the
employment contract
Amending Employment Contracts
Restructuring the Workforce
April 15, 2015 4
Wronko v. Western Inventory
• 2 year “sweetheart deal”
• Employer advised the employee that his notice period would change in 2 years
• Employee objected and continued to work. No notice of termination was
provided.
• After 2 years, employer imposed the new employment contract.
• Employee rejected, and sued successfully for constructive dismissal
“I cannot agree that an employer has any unilateral right to change a
contract or that by attempting to make such a change he can force an
employee to either accept it or quit.”
Constructive Dismissal – Wronko case
Restructuring the Workforce
April 15, 2015 5
1. Employee may accept the change in the terms of employment, either
expressly or implicitly through apparent acquiescence, in which case
the employment will continue under the altered terms.
2. Employee may reject the change and sue for damages if the employer
persists in treating the relationship as subject to the varied term.
3. Employee may make it clear to the employer that he or she is rejecting
the new term. The employer may respond to this rejection by
terminating the employee with proper notice and offering re-
employment on the new terms. If the employer does not take this
course and permits the employee to continue to fulfill his or her job
requirements, then the employee is entitled to insist on adherence to
the terms of the original contract.
Constructive Dismissal – 3 options from Wronko
Restructuring the Workforce
April 15, 2015 6
• Decision of BCCA in Allen v. Ainsworth Lumber Co. Ltd., 2013 BCCA 271
• Problem in Wronko and Ainsworth:
• Employee was entitled to a fixed contractual notice period
• The employer could not terminate without paying damages
• No obligation on the employee to mitigate
• Options available will depend on the terms of the Employment
Agreement
• Right to amend agreement unilaterally?
• Limited notice provision?
• Duty to mitigate?
• Working notice?
Constructive Dismissal – Continued
Restructuring the Workforce
April 15, 2015 7
Successorship:
• Employment is deemed continuous and uninterrupted
• Employees are deemed to quit if they do not accept substantially similar
employment with the new employer
• New employer must recognize service with previous employer for
vacation and termination entitlements
• Collective bargaining relationship continues with new employer
• No termination pay owed by the previous employer under ESA
• At common law, previous employer may be responsible for severance if:
• Employment agreement provides for notice and no duty to mitigate
• The new employer terminates employment within the notice period
Successorship
Restructuring the Workforce
April 15, 2015 8
• Under the ESA:
• Abbott v. Bombardier Inc., 2007 ONCA 233
• Employer transferred its information technology department to a new employer
• Employees accepted employment with the new employer and continued to
maintain their seniority.
• Former employer was not required to pay severance because contracting out
employees is a “sale of a part of a business” under the ESA successorship
provisions.
• The Court did not apply the more restrictive test under the Ontario Labour
Relations Act for determining whether a sale of a business had occurred.
Contracting Out and Successorship
Restructuring the Workforce
April 15, 2015 9
• Under the Labour Relations Code
• Contracting out is subject to the terms of the collective agreement
• Leeds Enterprises Ltd., BCLRB No. B271/96:
…there has been no transfer of a "business" for purposes of a
successorship where there has been a mere transfer of work with no
transfer of other components of a business, such as equipment, supplies,
good will or management personnel… If the work contracted out remains
part of the predecessor employer's business and the predecessor
employer has merely changed its method of carrying on business, and
most of the traditional indicia associated with successorship are absent, no
successorship will likely be found.
Contracting Out and Successorship
Restructuring the Workforce
April 15, 2015 10
• Under the ESA, employers are responsible for both individual and group
termination pay
• Individual termination pay ranges from 1 week to 8 weeks
• Group termination pay is payable for a termination of 50 or more
employees at a single location over a 4 week period
• Group termination pay:
• 8 weeks, if 50 to 100 employees affected
• 12 weeks, if 101 to 300 employees affected
• 16 weeks, if 301 or more employees affected
• Notice to union and Ministry also required
• Penalty for breach? R. v. Servisair Inc., 2011 BCPC 142
Termination and Group Termination
Restructuring the Workforce
April 15, 2015 11
• Section 54, Labour Relations Code:
• Measure, policy, practice or change that affects the terms, conditions or
security of employment of a significant number of employees
• 60 days’ notice to union
• After notice is given, employer and union must meet in good faith and attempt
to develop an adjustment plan, including alternatives, counselling, retraining,
severance, and benefit adjustments
• Does not apply if employees are exempt under section 65 of the ESA
• Definite term contracts; contract is impossible to perform (other than due to insolvency); construction
site; employees offered reasonable alternative employment
• Remedy for failing to give notice?
Adjustment Plan – Labour Relations Code
Restructuring the Workforce
April 15, 2015 12
• Section 96, ESA
• Directors and officers’ personal liability for 2 months’ wages
• Includes vacation pay, termination pay and salary
• Corporate officers are not permitted to file a claim under section 96
• “controlling mind of Corporation”
• Exceptions:
• Termination pay if corporation is in receivership
• Company is subject to insolvency proceedings
• Vacation pay or banked overtime that becomes payable after director or officer ceases to hold office
• Can’t bankrupt the company after the fact and absolve directors of
liability: Re Davis
Liability for Unpaid Wages
Restructuring the Workforce
13
Questions??
Mining seminar
43-101 and related considerations in mining disclosure
Brian E. Abraham, QC, P.Geo.
April 15, 2015
14
Technical report
• Nature of Report
• Exploration
• Resources
• Economic
• Preliminary Economic Assessment - PEA
• Prefeasibility Study - PFS
• Feasibility Study - FS
20 April 2015 15
Certificates
• Responsibility for different sections
• Site visit
• Experience in relevant area
Consents
• Avoid blanket consents
• Be specific in what is being consented to for the disclosure
20 April 2015 16
Materiality test
• Unwritten 20% threshold
• Metal prices impact
• Capital expenditures
• Operating costs
Metal prices
• Unique metals
• Diamonds and precious stones
• Reliance on non-QPs
20 April 2015 17
Resources
• Reasonable prospect for eventual economic extraction on all resource
categories
• Pit shells
• Underground operations from existing pit or proposed pit
• Preliminary feasibility study within the Pit shell
• Rounding of Resources and Reserves figures
• Economic analysis to include tax factors
20 April 2015 18
Non-independent QPS and reliance
• Legal
• Taxation
• Environmental
• Political
• Social
20 April 2015 19
Reviews
• CSA Staff Notice 43-309 – April 9, 2015
• Naming the Qualified Person
• Preliminary economic assessments and cautionary statements
• Mineral Resources and Mineral Reserves inclusion / exclusion
• Exploration targets and use of ranges
• Historical estimates – source, date, reliability, key assumptions, required
cautionary language
• Also consider:
• Data verification
• QA/QC
• Drill reporting grades/widths
20 April 2015 20
Notes
• Avoid words like “world class”, “spectacular”, “production ready” and
“ore”
• Avoid use of “anticipated economic analysis”
• Sites and presentations at conferences – booths are also reviewed
• Data verification statements
20 April 2015 21
Other factors
• Reliance on prior disclosed information
• Metal price assumptions
• Drilling information – true widths and hydrate intercepts
20 April 2015 22
Summary of 43-309
The significant concerns are the following:
• Naming the QP
• Preliminary economic assessment caution
• Resources are not Reserves
• Tax matters
• Exploration targets
• Historical estimates
• Resources including Reserves
• Metal price assumptions
• Effective dates
20 April 2015 23
Summary (cont’d)
• Cut-off grades
• Metal equivalencies
• Data verification
• Naming the laboratory
• QA/QC measures
• Higher grade intervals
• True widths
20 April 2015 24
BCSC review
• The BCSC will review on request prior to filing of a technical report where
there is a financing involved to provide preclearance
• TSXV review
• Required in many instances for property acquisition if property is material
20 April 2015 25
Policies
• 43 307 – preliminary economic assessments
• 43-309 as discussed above
• Production scenarios (Companion Policy 2.6)
• TSX policies
• TSXV policies
• 51-102 continuous disclosure obligations
• 51-102 F-2 Item 5.4 of AIF
• Qualified Persons and recognized organizations
• Foreign QPs
• Foreign codes
20 April 2015 26
Resources and reserves
• CRIRSCO (Committee for Mineral Reserves International Reporting
Standards)
• CIM best practices
• CIM Resources and Reserves Committee
20 April 2015 27
Discussion
• MD&A
• AIFs
20 April 2015 28
Watch points
• News Releases
• Material Change Reports
• Websites
• Conferences
• Booths and tradeshows
• Foreign Resource / Reserves reporting
20 April 2015 29
Dentons Canada LLP
250 Howe Street
20th Floor
Vancouver, British Columbia V6C 3R8
Canada
Thank you
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