In every non-unionized employment relationship, the employer has an implied common law obligation to give the employee reasonable notice of its intention to terminate the employment relationship, unless there is just cause for termination. If the employer fails to give the employee reasonable notice of termination, the employer risks a wrongful dismissal action for breach […]read more
Employment & Labour – Top Ten Cases of 2018
2018 saw a number of developments in employment and labour law. Below, we provide a summary of the top 10 Canadian decisions from the last 12 months that we believe Atlantic Canadian employers should be aware of coming into 2019.
Re Lower Churchill Transmission Construction Employers’ Assn Inc and IBEW, Local 1620 (Tizzard)
Arbitrator finds that accommodating cannabis use in dangerous work environment constitutes undue hardship in the circumstance.
Mr. Tizzard, a construction labourer, suffered from Crohn’s disease and osteoarthritis. To manage the associated pain, he used medically prescribed cannabis. This pain management regime was in place when, in 2016, he applied for a labourer position on a construction project. He was hired pending satisfactory drug and alcohol screening. Mr. Tizzard tested positive for drug use. Upon learning of the underlying medical reasons, the employer made numerous requests for additional medical evidence regarding his capacity to perform work safely. In the end, the employer refused Mr. Tizzard employment on the ground that his medicinal cannabis use created an unacceptable safety risk. The union grieved the decision, alleging a failure to accommodate.
The arbitrator denied the grievance, highlighting the employer’s inability to readily measure impairment from cannabis using current technology. Since the employer was unable to measure and manage the risk of harm based on available resources and medical opinion, Mr. Tizzard’s employment constituted undue hardship in the form of an unacceptable safety risk within the context of a relatively hazardous construction worksite. The union sought judicial review of the decision and it is being heard in January 2019.
Newfoundland & Labrador Court of Appeal upholds strict zero tolerance drug possession policy.
The grievor worked as a millwright on an offshore Terra Nova site. One day, prior to boarding a helicopter for transport to the site, a routine screening revealed a small amount of marijuana in his pocket. Although he maintained that he did not know how the marijuana ended up on his person, he was subsequently terminated for non-compliance with the employer’s drug and alcohol policy. The union grieved the termination.
The arbitrator interpreted the policy using the concept of strict liability and accepted the disciplinary action. The employee brought a successful application for judicial review. The applications judge held that the arbitrator’s interpretation of the policy was unreasonable as it excluded any element of intention. The employer appealed to the Newfoundland Court of Appeal (NLCA).
The NLCA restored the arbitration decision finding that commission of the prohibited act was sufficient to establish non-compliance with the employer’s policy. The applications judge erred by incorporating the element of mens rea (the intentional element of an offence) into the assessment of the arbitrator’s decision. The arbitrator’s interpretation and application of the policy fell within the range of reasonable outcomes.
Newfoundland & Labrador Court of Appeal provides guidance on when post-incident drug testing is permissible.
The employer ordered drug and alcohol testing as part of an investigation into a series of cargo manifest errors for helicopter flights from its offshore platform. These errors had the potential to affect helicopter flight and operations and also violated applicable safety regulations. As such, they constituted a “significant incident” within the meaning of the employer’s drug and alcohol policy sufficient to justify mandatory testing.
The employee found responsible for these errors was ordered to undergo testing and tested positive for benzodiazepines. As a result, he was terminated. The union filed a grievance, alleging that the employee should not have been tested. The arbitrator agreed and reinstated the employee. The employer brought an unsuccessful application for judicial review, and then appealed to the Newfoundland Court of Appeal.
The NLCA dismissed the appeal. Justice Welsh, writing for the Court, explained that post-incident testing requires an individualized assessment. Specifically, an employer must conduct a preliminary investigation to determine potential causes of the incident and to identify substance use as a possible factor. Here, there was insufficient evidence to establish a potential causal link between substance use and the incident. As a result, the employer was not justified in submitting the employee to a drug test.
Ontario Court of Appeal confirms common sense interpretation of termination clauses.
Mr. Amberber was a senior support representative with nearly 16 years of service with IBM. As part of a cost reduction strategy, IBM terminated his employment without cause by providing him with a severance package calculated in accordance with the termination provision set out in his employment agreement. However, Mr. Amberber proceeded to sue IBM, alleging that the termination clause of his employment agreement was ambiguous and thus failed to rebut the common law presumption that an employee is entitled to reasonable notice of termination. As a result, he sought increased damages in lieu of notice of termination.
After unsuccessfully moving to dismiss Mr. Amberber’s claim, IBM appealed to the Ontario Court of Appeal (ONCA), arguing that the terms of the employment agreement were clear and that Mr. Amberber’s claim for further damages must fail.
The ONCA sided with IBM. Justice Gray rejected overly technical interpretation attacks and instead confirmed common sense principles governing interpretation of employment contracts. Specifically:
- Parties may agree to something less than what would be awarded at common law, provided the minimum entitlements in employment standards legislation are made out;
- Where there is genuine ambiguity in a provision, courts will prefer the interpretation favourable to the non-drafting party (generally being the employee); and
- Contracts must be interpreted as a whole.
Applying these principles, the ONCA enforced the termination clause of the employment agreement. When read as a whole, there was no doubt as to its intended meaning. The motion judge had strained to create ambiguity where none existed. The employee was not entitled to anything beyond what was laid out in the termination clause.
Supreme Court of Canada confirms employers’ duty to accommodate injured workers receiving workers’ compensation benefits.
Mr. Caron injured his elbow while on the job and applied for workers’ compensation benefits. Following the injury, his employer reassigned him into a temporary position for a two year period. As Mr. Caron’s disability prevented a return to his prior position, and there was no other suitable role, his employment was terminated at the end of the two year period. The Commission charged with implementing Quebec’s workers’ compensation legislation offered to rehabilitate Mr. Caron so he could seek work elsewhere. Mr. Caron appealed the Commission’s decision claiming that his employer did not satisfy its duty to accommodate.
The case made its way before the Supreme Court of Canada (SCC). The central issue before the SCC was whether the duty to accommodate extends to employees receiving workers’ compensation benefits. The SCC held that the duty to accommodate, being a core principle of the Quebec Charter, does apply in such cases. Employers have an obligation to search for ways to facilitate a return to work, be it by modified duties or an alternate position. The SCC remanded the matter back to the Commission for reconsideration in light of the employer’s duty to accommodate.
Nova Scotia Court of Appeal confirms contractual language disentitling employee to incentive compensation over the notice period.
Mr. Matthews was a chemist who started working for a predecessor of Ocean Nutrition in 1997. In 2007, he signed the Long Term Incentive Program (LTIP) agreement, which entitled him to a payout in the event the company was sold during his term of employment. In the event of termination or resignation, however, the employee would not be entitled to a payout.
Mr. Matthews resigned in 2011, claiming constructive dismissal. The company was sold the following year. He submitted that his damages for constructive dismissal should include compensation for the loss of payouts under the LTIP that he would have otherwise received over a reasonable notice period.
The Nova Scotia Supreme Court held that the employee was entitled to receive the LTIP payment. The employer appealed. The Nova Scotia Court of Appeal allowed the appeal in part. Although the NSCA agreed that the employee had been constructively dismissed, the majority parted ways with the NSSC with respect to his entitlement under the LTIP. Justice Farrar, writing for the majority, explained that the terms of the LTIP governed the employee’s right to recover related damages. He proceeded to highlight two clauses that precluded a payout under the circumstances. One clause stated that the LTIP would be “of no force or effect” if Mr. Matthews ceased to be an employee, regardless of whether he resigned or was terminated with or without cause. This was in addition to a separate clause which provided that the LTIP would not be calculated as a part of Mr. Matthews’ compensation for any purpose, including in connection with resignation or severance calculation. In the majority’s view, this contractual language plainly and unambiguously disentitled Mr. Matthews under the LTIP.
Mr. Matthews applied for leave to appeal with the Supreme Court of Canada on December 31, 2018.
New Brunswick Labour & Employment Board sets parameters for the availability of first contract arbitration in labour relations.
The union was certified as bargaining agent for employees in January 2015 and filed a Notice to Bargain, seeking to negotiate a collective agreement with the employer, before February 2015. What followed was a drawn out and largely unproductive bargaining process. The parties began the process of collective bargaining in late 2015. After reaching an impasse, they attempted conciliation and mediation. Despite these efforts, negotiations broke down and did not resume until March 2018 at which point the parties came to a partial resolution.
In June 2018, the union filed a request for first contract arbitration under the New Brunswick Industrial Relations Act (IRA). If granted, the Labour and Employment Board (the Board) would direct the settlement of the first collective agreement by arbitration. However, looking to the statutory factors laid out in the IRA, the Board determined that the circumstances did not justify such an order. There was insufficient evidence to establish that the employer had taken an unreasonable or uncompromising approach in negotiations. With respect to the delay, the union had also failed to negotiate in a timely manner. The Board stressed that the first contract arbitration mechanism is not intended to displace free collective bargaining. The Board refused the request and referred the matter to mediation.
British Columbia Human Rights Tribunal dismisses complaint by professor denied tenure in lengthy decision covering numerous issues.
Ms. McCue is an indigenous woman and was, at the time, a tenure track law professor. In the years leading up to her application for tenure, she was advised that she was at risk of being denied tenure due to her lack of peer reviewed publications. The University of British Columbia (UBC) provided supports to assist her efforts in this area. Unfortunately, none of her works met the publishing requirements when she applied for tenure in 2011. During the application process, UBC expressed serious concerns about her scholarship. At that time, Ms. McCue raised her belief that, as a female indigenous scholar, she should not be bound by a traditionally western peer review standard. Other contributions, such as oral presentations, should be given weight. However, she failed to provide UBC with a substantive record of her oral work and was ultimately denied tenure.
Ms. McCue subsequently filed a human rights complaint in which she alleged that UBC discriminated against her in her employment under several protected grounds. In a lengthy decision, the British Columbia Human Rights Tribunal (BCHRT) dismissed the complaint. The BCHRT found that UBC did not discriminate when it denied Ms. McCue tenure, either on a systemic or specific basis. There was a lack of information available to assess her candidacy derived from her lack of interest in the process to achieve tenure. Notably, the BCHRT was critical of Ms. McCue’s failure to make a timely request for accommodation, commenting that this would have allowed for discussions on how her concerns could be addressed.
While too lengthy to summarize here, the decision contains useful commentary on various human rights matters, including jurisdiction, accommodation and cultural obligations.
Ontario Human Rights Tribunal makes record award of damages for injury to dignity, feelings, and self-respect.
The employee worked at a shoe store for approximately 28 years. The owner of the shoe store was also her landlord as she rented the apartment above the store. Her son had a disability that required her to live in close proximity to her place of employment. In 2009, she filed a human rights complaint alleging a pattern of reprehensible conduct on the owner’s part. The Ontario Human Rights Tribunal heard the complaint several years later. At the hearing, the employee testified that the owner had repeatedly sexually assaulted her and criticized her skin colour, accent, and body. When she finally reported the assaults to police, he behaved in a threatening and retaliatory manner.
After a lengthy analysis, the Tribunal held both the owner and company responsible for the pattern of harassment and awarded a record $200,000 in damages for injury to dignity, feelings, and self-respect.
Ontario Court of Appeal highlights class action risk when workers are characterized as contractors rather than employees.
This decision, released by the Ontario Court of Appeal on January 8, 2019, just barely missed the 2018 deadline.
In this case, the appellant was Mr. Heller, a provider of food delivery services through the Uber App. He, like all drivers for Uber, entered into a Driver Services Agreement (Agreement) with the company prior to becoming licensed to use the App.
In 2017, Mr. Heller commenced a proposed class action on behalf of Uber drivers. The proposed action sought a declaration that drivers are employees of Uber and are accordingly entitled to the benefits of Ontario’s Employment Standards Act (ESA). The Agreement, however, contained an arbitration clause stipulating that all disputes arising out of the Agreement would be resolved by way of arbitration in Amsterdam, Netherlands. Uber successfully moved for a stay of the Ontario class proceedings on this basis. Mr. Heller appealed to the Ontario Court of Appeal.
Justice Nordheimer, writing for the ONCA, held that the arbitration clause was unenforceable. As this was a preliminary motion, he assumed the drivers to be Uber employees as pleaded. On this view of the arrangement, the arbitration clause was invalid as it ousted provisions of the ESA (namely its complaints procedure) out of which employers cannot lawfully contract. Justice Nordheimer allowed the appeal on this basis, noting that he also would have set the arbitration clause aside for unconscionability in forcing drivers to pursue their claims in a foreign country.
While the class action process is far from over, this decision strikes a blow to companies who may wish to oppose class actions on the basis of arbitration clauses and contractor characterizations.
This article was written with assistance from Kelcie White, an Articled Clerk in Cox & Palmer’s Halifax office.