December 15, 2009
By Darren Rodrigues
Sinclair-Cockburn Financial Group

Picture yourself in the following situation: a long-standing employee of yours, one of the company’s best workers, has recently started missing days, arriving late to work, and leaving the office early. Fellow workers are complaining that they have to carry more of the workload. Rumours are circulating amongst the office staff that he has a drinking problem. However, it has also been suggested that his wife has left him, and he has had to look after a very ill child. He recently got into a shouting match with his supervisor.

What do you do?

  • Fire the employee?
  • Confront the employee and ask if the rumours are true?
  • Suggest to the employee that he seek professional help?
  • Do nothing and hope the issue resolves itself?

Make the wrong decision, and it could cost thousands of dollars.
A growing area of concern for small businesses in Canada is Employment Practices Liability (EPL). Since 1997, there have been over 300 cases, many of them with settlements over $50,000. Experts on EPL legalities, tell us that less than five per cent of cases end up in court, or in front of a tribunal. For each case that results in a decision from a court of law, or an administrative tribunal, there are many more cases that are settled with significant payments by employers. In some cases, senior management is facing personal liability for these exposures, even if their company is insolvent.

Claims may arise from a variety of exposures, including discrimination (sex, sexual orientation, age, race, marital status, illness, physical appearance, religious beliefs, etc.), harassment, assault, demotion, defamation, loss of reputation, unfair dismissal and infliction of emotional distress at work.

Employers face potential awards granted by both administrative tribunals and by courts of law. Traditionally, EPL coverage has been hard to find, unless offered on a director’s or officer’s policy, and usually with a substantial deductible. Recognizing the needs of these companies, Creechurch Insurance has developed a new program with the name, Employrite. It’s a package specifically designed for small businesses (up to 500 employees) that do not have directors’ and officers’ insurance.

Employrite coverage highlights:

  • Limits of $100,000 up to $5,000,000 available
  • Available to Canadian and U.S. employees
  • Claims based on discrimination, harassment and unfair dismissal
  • Claims made by employees, former employees or applicants for employment
  • Increased severance payments for unfair dismissal due to an employment practices liability violation
  • Full limit for punitive damages and exemplary damages
  • Third party coverage available for claims made by customers, vendors and other relevant parties
  • Extension of coverage available for fines, penalties, punitive and exemplary damages
  • Access to a toll-free hotline manned by a major Canadian law firm for human resources, personnel and claims-related questions
  • Entitled to receive a human resources handbook template

Employrite provides access to a toll-free hotline for human resources, personnel and claims-related questions. Rather than guess at the right course of action, you may pick up the phone and get immediate professional advice on the best course of action to follow. Early intervention, coupled with claims handling expertise, is a time and money saving device. You can call a team of legal professionals, even if you only have a suspicion based on lunchroom banter that a future claim may be lurking. You can receive a human resources handbook template that will help fulfill your human resources responsibility effectively.

This handbook addresses issues such as:
  • The employment relationship policy
  • Equal opportunity policy
  • Policy prohibiting sexual harassment
  • Family and medical leave policy, with summaries of federal and provincial rights
  • Benefits policy
  • Standard of conduct
  • Conflicts of interest
  • Electronic communication policy

Sinclair-Cockburn, through the HortProtect program, offers this coverage in addition to the usual commercial policy at a discounted premium. Don’t let a lack of information keep you from ensuring you have the coverage you need. If you have questions, give us a call.

Darren Rodrigues may be reached at 416-494-9883, ext. 361, or