Canadian Taxes A to Z (2018): "B" is for Business Investment Loss

Today, B is for Business Investment Loss. Two letters of the alphabet down, and 24 to go!

We all know that the key to tax happiness is maximizing your deductions, and minimizing your income. The more your deductions, the lower your income, and usually the lower your payable taxes will be. Generally speaking, business gains may eventually be taxable as income, and business losses may eventually be deductible to reduce income.

WHY BUSINESS LOSSES ARE MORE COMPLICATED THAN THEY SEEM

Unfortunately like lots of aspects of the Income Tax Act, things are a little more complicated than they should be when it comes to business losses. But that's why accountants and lawyers (and tax blogs) were put on earth to help you with your taxes.

A "business investment loss" (in the tax sense) can be used to reduce ALL sources of income (unlike other more limited capital losses), however it must relate to shares of a small business corporation (SBC) or a debt owed to the taxpayer by the small business corporation.

A SBC is defined by the Income Tax Act as a Canadian controlled private corporation using substantially all of its assets in an active business carried on in Canada. This type of claimable loss doesn't apply to public companies, companies not controlled by Canadian residents, or companies mostly operating abroad.

Fifty percent of the business investment loss can be used to reduce taxable income as an Allowable Business Investment Loss (ABIL). The loss is claimed on line 217 of a personal tax return.

HOW YOU CAN COMPLETELY WRITE OFF A LOSS & STILL OWN AN ASSET

Under s-s. 50(1) of the Income Tax Act you may be able to elect to have disposed of nil value shares or bad debts of a SBC and then have reacquired the shares or debt immediately after the end of the year for no cost. This could let you write off an investment, while still retaining ownership of the investment. Thus you could use a SBC later to start another business, while benefitting from the tax deductions now.

The CRA has a handy Interpretation Bulletin on Business Investment Losses called IT-484R2. Since there are quite a few hoops to jump through to benefit from this loss claim, I'd suggest you consult your friendly neighbourhood accountant about whether you're able to claim it.

Gordon S. Campbell is a tax lawyer practicing throughout Canada who has argued tax cases as high as the Supreme Court of Canada. Learn more at acmlawfirm.ca/taxlaw.

Canadian Taxes A to Z (2018): A is for Amortization

Thanks to Kelly Phillips Erb, aka @taxgirl and writer for Forbes, for originating the taxes A to Z idea, and giving me permission to adapt it to Canada. Her snappy, clear and cogent writing is capable of making anyone understand (and dare I say it, "like") tax. Like her, I took a tax course in law school, and loved it (much to my surprise). Now I help folks with Canada Revenue Agency (CRA) disputes, occasionally taking them as high as the Supreme Court of Canada.

I see Kelly's already up to the letter "R" (for Relief Funds) for the 2018 tax filing deadline in the U.S., whereas I'm stuck with the letter "A" for an April 30th deadline in Canada. I've clearly got some catching up to do! 

HOW AMORTIZATION IS A TAX CONCEPT

Today, A is for Amortization. You've probably heard about amortization when it comes to paying down your mortgage, but you might not have thought about it as a tax concept. 

You generally "depreciate" significant tangible property you purchase to earn income, like a vehicle or a building. The Income Tax Act refers to this as Capital Cost Allowance (CCA), and specifies a variety of rates depending on the type of property. 

For intangible property you acquire to earn income, like goodwill or intellectual property, you "amortize" it. The Income Tax Act calls this Eligible Capital Property, and again you can write it off at a certain percentage a year. 

You "amortize" intangibles rather than "depreciate" them, because they in theory can have an indefinite life that never wears out (unlike that orange Volkswagen camper van painted with flowers that you used to use in your outfitter business). 

HOW WHAT IS AMORTIZED IS A MOVING TARGET

Generally Accepted Accounting Principles (GAAP) rules have recently changed so that goodwill is now treated somewhat differently than other intangibles for write down purposes, so that it's tested each year for impairment, rather than simply (yes, perhaps I'm overly stretching the meaning of the word "simply" here) "amortized." But you still amortize other intangibles like patents, as they'll eventually expire.

The concept to get here is that if you've purchased something for the purpose of earning income, then you're allowed to gradually deduct its cost as it wears out - even if its not a tangible thing. But since goodwill (and supposedly diamonds) is forever, you might not be able to deduct it unless you can show some proof of its diminishing in value. 

HOW AMORTIZATION WINDS UP IN THE TAX COURT OF CANADA

You can get in all sorts of trouble with the CRA by trying to deduct something as a current expense at a 100% rate that should actually be amortized. But I also help clients where the CRA sometimes unfairly denies current expense deductions of something that the CRA claims requires amortization, but which in my opinion does not. Ultimately the Tax Court of Canada gets to decide. 

A Frankfurt team of accountants has come up with with this cool (at least for those of us fond of tax concepts) comparison of tax amortization rates by country and type of intangible: http://www.taxamortisation.com.

Gordon S. Campbell is a tax lawyer practicing throughout Canada who has argued tax cases as high as the Supreme Court of Canada. Learn more at acmlawfirm.ca/taxlaw.

How to Move with Your Child or Stop a Move of Your Child After a Divorce or Separation: Top 5 Factors Favouring a Move and Top 5 Arguments to Oppose a Move

When courts were more focussed on parental “rights” rather than “best interests of the child,” it seemed they were more reluctant to let one parent move with a child such a distance away that regular access of the other parent would be logistically challenging. But more recently, it appears courts have had a reality check realizing that Canadians are more mobile than ever for work, study and family reasons, and that trapping both parents in one spot - often a spot they aren’t originally even from - until all their children are grown is simply not in the best interests of those children. 

Not surprisingly, the parent who doesn’t want to move often fights such moves by the other parent. Sometimes successfully. There is a significant rate of family court contested hearings on mobility issues because of the dramatic way that each parent will be impacted by a move of one of them away from the geographic spot of their split. 

You can generally break moves with children down into short, medium and long distance. The short moves - under 100 km - are really no brainers. Looking at the caselaw, courts will almost always agree that one parent can move that distance. It will lengthen the duration of access transitions, but not overly frustrate weekly transitions. So fighting a move like that might mostly get you hit with a large costs award.

Medium and longer distance moves are more controversial, but their court results will be factually specific. Courts have often authorized what I would called medium distance moves of 500 km or so, seeming to think that regular access is still possible even though it will be a bit of a hike. Moves across the continent or to a different continent become more challenging still, but courts have even regularly authorized those when deemed to be in children’s best interests. 

THE SUPREME COURT OF CANADA'S TAKE ON PARENTAL MOVES WITH CHILDREN

Over 20 years ago, the Supreme Court of Canada in the seminal case of Gordon v. Goertz, [1996] 2 S.C.R. 27 found: "While a legal presumption in favour of the custodial parent must be rejected, the views of the custodial parent, who lives with the child and is charged with making decisions in its interest on a day-to-day basis, are entitled to great respect and the most serious consideration. The decision of the custodial parent to live and work where he or she chooses is likewise entitled to respect, barring an improper motive reflecting adversely on the custodial parent’s parenting ability.”

As courts are now drifting away from inflexible concepts like “custody” versus “access,” whether a move should be authorized in a truly shared parenting arrangement may be a more challenging question to resolve. But the same principles will apply regardless of the custodial arrangements: it’s all about the best interests of the children. 

IT'S MOSTLY ABOUT THE FACTS, NOT THE LAW, SO PRESENT COMPELLING HARD EVIDENCE OF BEST INTERESTS

Like a lot of family law, whether a move is or is not approved by a court has a lot more to do with the weight of the presented evidence, than with some magical legal authorities. Best interests of the child start with maximum contact with both parents. So if that contact is going to be lessened with one parent - perhaps significantly lessened - there needs to be a significant counter weight of best evidence to show why there will be an overall net gain to best interests with a move that ultimately involves reduced frequency of contact with one parent. Uncertainty on the court's part as to whether or not a move is a good thing will likely result in preserving the status quo, and no move being approved. 

Although most "misconduct" is not supposed to count anymore in family law, that doesn't apply to breaches or agreements or court orders, so if one parent jumps the gun and moves anyway without consent or a court order, it might become a lot more difficult to get court approval after the fact.

HOW TO BEST PROMOTE A MOVE WITH YOUR CHILDREN

1. Demonstrate there is a tangible change in circumstances since the agreement or order. This is an official precondition to a court considering a motion to change custody, unless you've only got an informal agreement which doesn't really count for court purposes. 

2. Demonstrate that the children will be economically much better off after the move, such as by better parental job prospects or reduced housing costs. Don’t be vague or speculative. Actually get a better job first that is conditional on being able to take the children, as difficult as such a conditional offer might be. Present written evidence of the job. Present written evidence of the type and cost of accommodation. Produce economic statistics from the region to which the move is proposed.

3. Demonstrate that the children will be educationally, physically and mentally better off after the move. Show proof of better schools, perhaps with specialized education programs. Show proof of specialized medical treatment programs. Especially show proof of extended family support in new location, like grandparents, uncles, aunts, cousins. Don’t be vague. Include letters from real people identifying the children in question, and their admissibility to these programs. 

4. Demonstrate that the other parent won't be economically disadvantaged by the move by offering to pay all costs of travel of either children or non-custodial parent for access visits.

5. Demonstrate that the principle of maximum parental contact will still be honoured to the greatest degree possible after the move through describing in detail electronic means and timing of remote access with children, plus generous in-person access which might include all summer holidays, and even every Christmas and March break forever. The courts are receptive to proposals that the parent staying have longer terms of uninterrupted access, even if access won’t be as frequent as prior to the move. Do the math, counting hours and days of access under the current regime, and contrasting that to the numbers under the proposed regime. Produce detailed calendars.  

HOW TO BEST OPPOSE A MOVE OF YOUR CHILDREN

1. Assert there is no real change of circumstances since an agreement or order. The court will sometimes toss an entire motion to move on this basis. While it can be difficult to win on this argument alone, there is not really any downside to attempting to make it. 

2. Demonstrate how well the children are currently doing in their present environment. Be specific. Cite all the things they will be torn away from. Produce documentary proof. Produce contrary proof that those things won't be available in the new proposed home location. Demonstrate the speculativeness of the advantages cited in favour of the move: perhaps no job or housing has been secured yet, and perhaps an overly optimistic economic, educational and lifestyle view of the new location is being presented to the court by the parent seeking the move. 

3. Demonstrate the relative equality between the parents of current access/custody arrangements, and how lopsided that will become if the children move away with one parent. Courts will be more likely to approve a move for one parent already spending much more time with the children than the other parent. 

4. Demonstrate the lack of real ties of the children and either parent to the new proposed location, as compared to the current location. 

5. Demonstrate the great logistical difficulties presented by regular access between the old and new location, including the significant financial cost, tiring nature of travel for young children, time zone differences, that winter driving between locations is hazardous or that driving isn’t even possible because of distance. 

Even though parties might be able to represent themselves on minor changes to access or custody arrangements, like times or locations of pickup or drop off, or what school should be attended, the catastrophic consequences for one parent of winning or losing a geographic move motion means that you should always be considering retaining legal counsel to help you with it.

Such motions don't need to consume untold resources so long as you push them to a hearing date as quickly as possible, without too many preliminary case conference or settlement conference court appearances. Devoting lots of personal efforts to compiling and organizing a strong factual evidentiary record favouring or opposing a move will save you lots of money on a lawyer as a parent, as that will let the lawyer focus on the law part rather than the facts part of the court equation. 

Gordon S. Campbell is a Family Law Barrister practicing throughout Ontario. Lean more at www.nofearfamilylaw.com. 

Why Business Owners & Employees are at Risk of Being Accused of Fraud: Top 5 Tips on How to Protect Yourself Against Career & Life Ruining Criminal Charges

Many of us think wrongly that there is a stark distinction between the civil action world and the criminal charge world. That a falling out between business partners, or between employer and employees, will at worst lead to a civil lawsuit, or complaint to the labour board, so long as no one tips over the edge into assault or threat of violence. Not true. 

Business partner and employer accusations of criminal conduct by former partners or employees are a lot more common that you might think. Unfortunately, such accusations are sometimes made in an attempt to gain a strategic advantage in a civil settlement. 

Criminal Fraud Is Very Close to Civil Fraud or Deceit

The criminal offence of fraud is very similar to the civil torts of fraud or deceit. There’s a higher standard of proof for the criminal charge, but also far more career ending, life destroying consequences upon conviction.

Fraud is very broadly defined at section 380 of the Criminal Code: "Everyone who, by deceit, falsehood, or other fraudulent means ... defrauds the public or any person, whether ascertained or not, of any property, money, or any valuable security or any service, is guilty …” Note that even public frauds like tax evasion could be criminally charged. Criminal Code fraud punishment ranges up to 14 years imprisonment, making this one of the most serious Canadian offences on the books. By comparison, even the most serious of sexual assaults can only attract a 10 year term of imprisonment unless the victim is under 16 years of age, in which case the potential penalty is still only the same as fraud. 

Accidentally use that employer gas card to fill your own car, and not be believed that it was an accident? Or use it with the permission of your employer, who then “forgets” you got permission? Or maybe just use it for $30 of gas because you didn't think anyone would notice. Criminal charge. Or professional misconduct charge. Think it can’t happen? Ask the Canadian police officer who was prosecuted and fired for that $30 of gas on the corporate card (and I do mean $30, and I have a copy of the case to prove it). 

Give yourself a $2 an hour raise because your employer told you to. And not have the employer sign anything confirming that raise, which only becomes an issue years later when there's a falling out? Criminal charge. 

Bad falling out with your business partners? They claim you took more than your fair share of the profits? Criminal charge. 

As a lawyer who has regularly prosecuted, investigated, and defended all manner of frauds, here are my top five tips for protecting yourself against unjustified fraud allegations. 

1. Get It In Writing

Courts love paper (or the electronic equivalent), and distrust words. But just claiming verbally after the fact that you had an agreement with someone may carry little weight if that claimed agreement appears to be self-serving, and others contradict your recollection of any agreement. 

Email actually helps a lot with getting it in writing, because courts seems consistently in my experience (and I go to court a lot) to take email as gospel, absent proof to the contrary. No signature. No letterhead. No proof the recipient event read it. Or the sender even sent it for that matter. Courts don't seem to care, unless someone directly claims the documents is itself fraudulent. Text and social media messages might be accorded similar weight by a court. 

In the (not so) good old days, to ask someone for a typed or even handwritten note, with their signature at the bottom, was often a bit over the top in order to prove an informal agreement. Thus the electronic world, while perhaps killing off the art of letter writing, has massively expanded the use of the written word. Why phone someone and then try to clumsily record the scratchy conversation, when you can just exchange emails? 

This get it in writing principle applies as much to complex business partnership profit sharing agreements, as it does to using the company gas card to fill up you car. If it’s in writing, you're at least sort of covered. Verbal, and it's your word against whoever later disagrees with you.

The get it in writing principle also applies to your own record keeping, where you should preserve all records of communications, and make detailed notes. While contemporaneous notes aren’t as good as actual exchanges of communications because they don’t give other parties the opportunity to correct misinterpretations, they can still be very useful if you record conversations in ways that are later difficult to deny. 

2. Say Nothing If There are Allegations

If you do get accused of something possibly fraudulent, say nothing. Don’t try to get into a complex web of admissions and denials by yourself. No, “oh yeah, I took $100, just not $20,000.” By admitting that, you’re much more likely to get pinned for the entire amount. 

As obvious as this say nothing principle might seem, I’ve found there is an almost unstoppable human impulse to explain things. To “set the record” straight. Trust me, nothing you say will help you. 

This say nothing principle applies as broadly as not settling any kind of civil law suit if there remains a pending threat of criminal action. Even if a proposed agreements says the settlement will be confidential, don’t believe it. It still might be held against you. 

3. Don’t Believe the Admit It & We Won’t Report It to Police Claim

On my long list of head shaking “that’s professional misconduct, you know” sighs, is the lawyer ethics rule that you can’t threaten to report someone to the police in order to gain a civil advantage. Yet I see it happen over and over again. 

Just as the police need to exercise some charging discretion when disputes appear to be more civil than criminal in nature, my colleagues in the legal profession likewise sometimes confuse the civil with the criminal, sending my clients threatening letters (which is a legitimate lawyer speciality if only civil consequences are sought), that threaten criminal consequences if my clients don’t do whatever civilly is being claimed. They seem to have missed that chapter in the bar ad materials teaching that they are explicitly prevented from doing this, worded as follows in the Law Society of Ontario’s Rules of Professional Conduct (I think most other law societies have similar prohibitions):

3.2-5 A lawyer shall not, in an attempt to gain a benefit for a client, threaten, or advise a client to threaten, without reasonable and lawful justification:

(a) to initiate or proceed with a charge for an offence, including an offence under

(i) the Criminal Code or any other statute of Canada; 

(ii) a statute of a province or territory of Canada; or 

(iii) a municipal by-law; or

(b) to make a complaint to a regulatory authority.

[1] It is an abuse of the process of a court or, ordinarily, a regulatory authority to threaten to make or advance a charge or complaint in order to secure the satisfaction of a private grievance. Even if a client has a legitimate entitlement to be paid monies, threats to take penal action are not appropriate.

So if you get a letter like this, or are even verbally told by a partner or employer that if you just settle civilly they won't report you to the police, don’t believe it. The civil has nothing to do with the criminal. It is the Crown that controls the investigation and prosecution of crime in Canada. Victims' wishes are not paramount (even if they perhaps should be). So if the police hear through any source about a fraud, charges might be the result, even if you were promised otherwise by the victim. And those charges won’t be an abuse of process, unless you explicitly cut some kind of deal with the Crown. 

4. Fix Anything that Might be Perceived as Fraudulent

If you do accidentally use that corporate gas card to fill up your own car, move as quickly as you can to fix the issue. Criminal fraud requires “intent,” meaning the Crown would have to prove more than just negligence on your part in using a card (or diverting hundreds of thousands of dollars in director bonuses for that matter). 

So if you discover a mistake, or upon further reflection come to believe that an action you took might later be perceived by others to possibly be fraudulent, don’t simply hope that no one notices it. Once you’re challenged on it, it will usually be too late to fix. Rather, move proactively to reimburse your employer for the gas money. Or to pass a board of directors or shareholder resolution to authorize those bonuses. 

5. Hire a lawyer

Lawyers are the best value when they’re used in a preventive medicine kind of way to head off court proceedings, rather than fight those proceedings (civil or criminal) once they’ve commenced. A few hours of a lawyer’s time might be able to kill off any hint of fraud in advance, whereas once the F(raud) word has made its way into the court system, it could take many dozens or even hundreds of hours of lawyer time to erase it. 

The purpose of the lawyer is not just to provide advice, but also to actively engage with the potential accusers to clarify what the evidence really amounts to, and whether the client’s response can put any allegations to rest. 

Gordon S. Campbell assists with the investigation, civil prosecution, and civil & criminal defence of business and other fraud throughout Ontario. He has litigated fraud-related cases as high as the Supreme Court of Canada. Learn more at acmlawfirm.ca, proconductlaw.com and defenceeast.com. 

Why You Need to Resist the Urge to "Just Get it Over With": Top 5 Things to Consider When Thinking About Pleading Guilty to Any Kind of Charge

Four teens are in a car headed down the 401 from Toronto for a fun weekend in Montreal. The driver's a little over the speed limit - maybe more than a little over. And reasonably enough they get stopped on the highway for a traffic offence. A single marihuana joint is noted by the stopping officer sitting on the vehicle's centre console between driver and front seat passenger. All four are charged with a criminal offence under the Controlled Drugs and Substances Act. What should each of them do? (And no, this is not invented, as defence counsel I've dealt with multiple cases identical to these facts). 

I'm often asked by my clients: "should I plead guilty? What you do think I should do?" These questions are as equally applicable to serious criminal allegations like narcotics trafficking as they are to regulatory offences like highway traffic violations.

Unfortunately, a guilty plea is such a weighty personal decision, potentially having such great ramifications for my clients' lives, that I can't give them direct answers to those kinds of questions. As much as I would like to. But there are a few ways I can help them come to their own most important of personal decisions. 

The best I can do is explain to them: (1) all of their options (sometimes there are more options than simply plead or don't plead); (2) the likely consequences of their options, and (3) that usually they don't have to make an instantaneous decision about pleading. They can take a few days or weeks to talk it over with friends and family, and ask me follow up questions. The last thing I want for any of my clients is to later regret whatever decisions they arrive at. 

There are five primary factors I tell my clients to consider when deciding whether or not to plead.

1. Did you actually commit an offence act? 

For clients who are completely innocent of any wrongdoing, I can't ethically help them plead guilty to things they didn't do. Even though they might be offered good plea "deals" and even though those deals would get their matters out of the way so that they could move on with lives. 

I grew up in a naive bubble thinking the innocent could never be charged. But I've since learned there can be all sorts of factors contributing to who does or doesn't get charged. 

But there's some nuance to this question of whether they actually "did it" from a legal perspective. Even if you didn't do exactly what is alleged factually or legally against you, you might have still committed some kind of other offence, and so you might still be able to properly plead to something. Perhaps just not what you are charged with. Criminal defence lawyers can occasionally magically transform one charge into another charge with the cooperation of the Crown Prosecutor. 

But for others, like the four teens in the car, is it really plausible they were all jointly in possession of one joint?

2. Can you live with likely consequences of a guilty plea?

If the consequence of a plea will be a criminal record, and you absolutely can't live with that - perhaps because it would ruin your career - then you probably won't want to plead. Likewise if there will be a consequence like a two year driving suspension that you can't live with, again you'll want to think twice before pleading.

But if the consequences won't ruin your life - maybe you'll be getting a discharge that avoids a criminal record, or receive a fine that avoids jail - that a plea might be a good idea. But only if you're actually guilty. 

3. Can you financially & emotionally afford to go to trial? 

The answer to this question might depend on the kind of charges you are facing. Going to trial on an impaired driving charge might only cost you a few thousand dollars in legal fees, and the time waiting for a trial date could be under a year. However, going to trial on a drug conspiracy might involved tens of thousands of dollars in legal fees, and many years of legal proceedings as the case drags through first a preliminary inquiry and then possibly a multi-week trial.

Some of my clients just "want to get it over with" and move on with their lives. Whereas others are willing to be patient, and spend a year or more waiting to see how things play out. 

Whether a client gets bail is perhaps the most significant determining factor for continuing to fight a case through to trial. I've had clients spend many years on bail, still able to work and see their families, so long as they comply with their bail conditions. Whereas if you lose your bail hearing, and then possibly lose a bail review, you could be looking a spending far longer behind bars waiting for trial than you would ever spend imprisoned after losing a trial. 

4. Is the sentence after trial likely to be much worse than the sentence on a plea? 

The rule of thumb is that a guilty plea will save you about 1/3 off your sentence. But sometimes the difference may be a lot more or less. Like the difference between getting a criminal record, and not getting a criminal record.

Thus you and your lawyer will need to carefully evaluate the "bad outcome" risk of going to trial. For example, upon a plea to a first offence impaired driving the accused will usually receive a fine. After trial, it will usually also be a fine. Thus there is not much risk in proceeding to trial (although it could effectively result in a longer period of driving prohibition). But if the Crown will take a fine on a plea, and will want three months in jail after trial, then that is a huge difference. 

5. What are the chances of winning a trial? 

This is a question to which your lawyer might not be able to give you precise odds, but she or he should be able to tell you in general terms whether you have a defence to present. Sometimes the defence might be very "technical" (like that an officer wasn't properly qualified to administer a particular test), sometimes it might be based on a violation of your "rights" (like that there was no legal power to search you car), and at other times it could simply be based on your testimony needing to be believed at trial that you "didn't do it." Your lawyer should be able to tell you if you have good or bad prospects of success at trial, based on the evidence the Crown plans to present against you, and the legal defences you'll be able to raise. 

But ultimately any trial is a gamble, for both sides. Because the criminal standard of proof of "beyond a reasonable doubt" is so high, no matter what you're accused of, and no matter how overwhelming the evidence against you, you'll probably always stand a chance at trial. Memories fade. Evidence is lost. Judges are humans who can come to different opinions faced with the same evidence. 

For any these top 5 considerations, the key point to remember is that you should get some legal advice prior to making the decision to plead or not plead. That advice might be from your own privately retained lawyer, from a lawyer paid by legal aid, or from duty counsel in the courthouse. Where you get the advice is less important than the fact that you need such advice prior to pleading or setting a trial date. Information is power here. The last thing you should be doing is pleading to something you didn't do, and to which you have a strong defence, just to get it over with, or because the system seems stacked against you.

Gordon S. Campbell is a criminal and regulatory defence lawyer, who served as a Federal Crown Prosecutor on trials and appeals throughout Canada up to the level of the Supreme Court of Canada. He's the author of The Investigator's Legal Handbook (Carswell 2006; 2nd ed 2014) and Le manuel juridique de l'enquêteur (Yvon Blais, 2010) series of books. Learn more at defenceeast.com. 

Workplace Harassment: Six Things You Can Do To Address It

The #MeToo movement has sparked conversations on and off social media about gender equality, violence against women, consent and bullying. Power imbalance has existed since the dawn of time. But as our societies become more modern and complex, the issues of power and inequality are far from being resolved. It seems that power is being exercised unfairly in every possible setting: in romantic relationships, in social functions, but also in the workplace. This begs the questions: what can employees do to address and prevent harassment in the office? Before this question can be answered, it is necessary to understand what actually constitutes harassment.

What is harassment?

Ontario legislation defines workplace harassment as vexatious comments or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome. This includes offensive, embarrassing, humiliating and demeaning words or actions against a worker or a group of workers. Common examples of harassment are:

• making remarks, jokes or innuendoes that are meant to ridicule or intimidate;
• circulating digital or hard copies of inappropriate material; or
• calling someone or sending e-mails excessively.

Some behaviours, while frowned upon by some, do not necessarily fall under the definition of harassment. For instance, reprimand by a manager towards employees, heated discussions and debates or conveying indifference about someone or something would typically not be viewed as harassment. Most occurrences of harassment involve repetition of wrongful actions over some time. However, it is possible that a single event rise up to the status of harassment, especially if it quite egregious and damaging to the person targeted by the wrongful conduct. There is a fine line between being harassed and just being overly sensitive. When in doubt, get some legal advice to know whether or not your issues at work need to be addressed in a more formal manner.

What Can Employees Do To Address Workplace Harassment?

1. Learn and Follow Internal Workplace Policies

Employers have a duty to create and implement workplace harassment policies, and to review them annually. Employers must also have procedures in place allowing employees to place complaints and report incidents about harassment instances without fear of reprisal.

As an employee, it is important to take the time to review these policies and abide by them. If you have experienced harassment, do not wait for things to get better on their own – you should address the problem right away. Go talk to your direct supervisor and any human resource person about the incident in question. If you are a unionized employee, discuss with your union representative as soon as possible.

2. Keep Records of the Incident

Take notes of the words that were said to you or the behaviour geared towards you. If there were other individuals present during the harassment, write their names down. Make sure you keep track of the location and time where the incident took place and whether it actually occurred at work. If disturbing material was sent to you, make sure you keep a copy to support your allegations. These records will be of vital importance to discuss and support your allegations of harassment.

3. Attend Any Programs Available To You

Most workplaces will have certain programs to help employees who have been harassed. Find out whether there is a possibility for you to receive any assistance in a confidential manner. Do not be shy to be accommodated. For instance, it can be beneficial for a worker who experiences harassment by a manager to work in another department or at different hours if possible.

4. Call the Police

In some cases, instances of harassment amount to criminal behaviour. This can be the case where the unwelcomed behaviour comes from a person in a position of power. Generally, it is crucial to have the police involved in cases of bodily harm, unwelcomed touching and stalking. If a criminal investigation ensues, make sure the person being investigated is not allowed to contact you directly or indirectly.

5. Place a Complaint Before the Human Rights Tribunal

The Ontario Human Rights’ Tribunal deals with complaints based on discrimination and harassment. If internal remedies have been unsuccessful, employees may try to resolve their issues by having their dispute handled by an administrative tribunal.

The process involves making a written complaint, reviewing a response, attending a mediation session and finally having the matter heard before an impartial decision maker. Employees who believe they are being subject to harassment should not delay in bringing their claim forward. The Tribunal may refuse to hear matters where the events occurred over a year before the claim was brought before it.

6. Be Willing to Walk Away

As difficult as it is to say, not all matters can be resolved amicably. While employees can certainly take measures to prevent and address harassment, unfortunately, there are times where the harasser refuses to stop engaging in vexatious conduct. If an employee has exhausted all his or her avenues and is still being harassed, sometimes, the best thing to do is to walk away from the situation altogether and seek employment elsewhere. In that case, it can be helpful for the employee to obtain legal advice to negotiate a fair severance package prior to his or her departure.

Karen Kernisant is a lawyer at Aubry Campbell MacLean and practices in the areas of Employment and Family Law as well as Civil Litigation.