Out of the mouths of gurus…..

May 31, 2017

This post originally appeared in the Abbott Aerospace March 2017 Newsletter. Click here to Subscribe

I rarely engage in public debate on social media platforms. There is usually little point as it is not a good forum to make people change their mind. It usually ends up as a name calling exercise and you end up either arguing with a fool, acting like a fool or both. I do engage in private correspondence with many people on many issues. This article comes out of a mostly private exchange with a management and efficiency guru. I will not reveal the name of the individual or quote any of his responses at any length, other than those he posted publicly.

One of the many reasons we left Canada and relocated to Grand Cayman was to reduce the regulatory burden of operating the company. Public liability, employment, taxation, professional status, environmental….you name it, in Canada if there is an activity there is a federal and provincial legal statute, regulation and policy to govern the execution of that activity – and, of course, costs for demonstration of compliance and penalties for non-compliance.

In Cayman, the expectation is that you behave. There is employment law but it is clear and short and an average person can read the statute and understand their statutory obligations as an employer.

For comparison purposes this is a link to the Canada Labor Code (http://laws-lois.justice.gc.ca/eng/acts/L-2/FullText.html) to save you the trouble, there is over 250 pages of over 86000 words.

To make things confusing – there is also the Canada Labor Standards Regulations (http://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._986/FullText.html) this give you another 11900 words to review.

If you don’t have enough reading material, there is also the employment equity act (http://laws-lois.justice.gc.ca/eng/acts/E-5.401/index.html), another 8000 words

To avoid you running out of material to read here are the Canada Occupational Health and Safety Regulations (http://laws-lois.justice.gc.ca/eng/regulations/SOR-86-304/FullText.html), over 55000 words.

There are also varying rights and obligations in different provinces across Canada (http://www.cic.gc.ca/english/work/labour-standards.asp?_ga=1.196689964.1203278258.1491091948)

We used to operate out of Ontario, so let’s go through all the laws in Ontario that apply to employment

The Ontario Employment Standards Act (https://www.ontario.ca/laws/statute/00e41/v42) – over 62000 words

The Employment for Foreign Nationals Act (https://www.ontario.ca/laws/statute/09e32?_ga=1.2431352.931789420.1491140384) over 8500 words

The Pay Equity Act (https://www.ontario.ca/laws/statute/90p07?_ga=1.262354244.931789420.1491140384) over 17500 words

To be honest, I am sure that I have missed several aspects of employment law in Canada. However, from what I am aware of there is at least 250,000 words of applicable regulations that, as an employer, you have to be aware of – just with regard to taking on an employee.

Don’t get me started on legislation related to taxation…..

The Cayman Islands Labor law is here (http://www.gov.ky/portal/page/portal/dlphome/publications/laws-and-regulations/labour-law-2011-revision) and has 16000 words

In Cayman, it is at least 15 times ‘easier’ (‘easier’ can mean cheaper, less risk, less stress) to be in compliance with the law.

We use a single page employment contract (less than 500 words) to describe our obligations to our employees and subcontractors and their obligations to us.

In contract law, if the contract is too complex to be understood by any of the parties signing the contract that is a valid defense if a breach of contract occurs. In the case of statutory law, ignorance of the law or inability to understand the law is not a defense.

I believe in the value of law – they are the rules that we all agree (under the ‘social compact’) to live by. The law is so expansive and complex in Canada that there is no practical way to be in compliance at municipal, county, regional, provincial and federal level. As a small business if you are in compliance it is only by chance, not by design and this is legally indefensible.

Having stated all that as a background – back to the point in hand. A management ‘guru’ posted the following on a political post about Trump

“..regarding Trump,  all are welcome to help distribute the following materials that clearly explain how/why reducing regulations increases business costs…..”

Yes, you read that correctly – reducing regulation increases business costs. Ironically the article was about Trump’s rescinding of the Obama executive order that created regulations in order to increase business costs and close down the coal industry in the US. Regardless of your political or environmental views, this is a case where regulations were introduced to specifically raise business costs with the stated intent to shut down an industry. A practical example that exactly contradicts this gurus view.

The guru asked me to connect, which I did. He then sends me a message to introduce me to all the free materials his institute provides. In return, I sent him a link to our free Ebook and reference library and requested that he clarify his statement as I was interested if he was really serious or he was just trolling.

We had a spirited back and forth. The guru’s messages got rather heated and oddly personal and it ended up that he would not answer my direct points but that I had to read his 250-page book to discover how wrong I was. His book is free, but if you can’t answer relatively simple points and have to refer to a 250-page monolog your argument is possibly unclear and certainly verbose.

This ‘guru’ makes a good living advocating for tighter and tighter regulations because he believes that it gives financial benefits to all companies. He places no limit on the benefit of regulations that force companies to do what is perceived in the common good according to the prevailing wisdom of the day.

Most of the western world has passed the net beneficial limit of legislation. The cost of compliance and the consequences of non-compliance are only able to be borne by large corporations. Small companies and individuals engaged in business in these jurisdictions risk financial ruin because of their inability to devote the resources necessary to remain in compliance with applicable laws, regulations and policies.

I don’t want to dismiss all of the points made by the guru – his crusade is to reduce waste, which is a good thing and is good practice for all businesses. An increase in regulation is, at best, another bump in the road, it can be a reason to relocate or at worst it can be a reason to close down for good.

So – it would be unfair not to put this in the context of the new part 23 airworthiness regulations. Do the new regulations constitute what I want to see – less regulations? More flexibility? Compliance cost reduction? Or are they more of the same – and possibly worse, dressed up as a business benefit?

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