Human resource ("HR") issues can be challenging for volunteer Boards of not-for-profit and condominium corporations.
Even when a Board has delegated responsibility for day-to-day operations to a paid Executive Director, there will be times when a Board Executive or HR Committee or a full Board will become involved in personnel issues.
Depending on the directors' knowledge of HR matters, and the extent to which the corporation seeks specialized legal advice, there is a risk that a Board's HR decision could result in a letter from an employee's lawyer and potential liability for the corporation.
New Board directors are often surprised to learn that their organization's legal obligations with respect to employment matters are the same as those of large, for-profit corporations.
This arises most frequently in the context of employee terminations. Many directors assume, incorrectly, that if an employee's performance is unsatisfactory, the corporation can terminate the employee for "cause", without notice. A further surprise can be the length of the notice of termination period. While the provincial Employment Standards Act, 2000 sets out the minimum notice (eight weeks maximum) for an employee who is terminated "without cause", the employee may be entitled to months of "reasonable notice" at common law. The reasonable notice period for an older, long-service employee without a contract limiting her entitlements, for example, could be as long as 24 months. The financial status of an organization, even if its government funding is withdrawn, will not justify a shorter notice period.
Provincial laws dealing with human rights and occupational health and safety extend equal rights and protections to most employees working in Ontario. Employers, no matter how small their budget, have a legal duty to provide a non-discriminatory workplace that is free from violence and harassment and to accommodate on human rights grounds. Employers must also know the very precise rules (and exceptions) for hours of work, public holidays, vacation and overtime pay, and protected forms of leave set out in the Employment Standards Act.
One challenge unique to Ottawa is that many volunteer directors are current or retired federal public servants who have worked in a federally-regulated, unionized environment. Problems can arise when these directors try to impose or incorporate in a corporation's HR policy manual workplace practices – a formal, multi-step grievance procedure, for example – that are not appropriate in a small, non-unionized, provincially regulated workplace.
Prudent Boards can limit their exposure to substantial damages and the costs of defending a wrongful dismissal, employment standards or human rights claim by seeking advice from an employment lawyer prior to implementing significant HR decisions.
