Employment & Labour – Top Ten Cases of 2021
It is no secret that over the past year the COVID-19 pandemic has been the subject of much discussion in the realm of employment and labour law. In 2021, we saw courts and administrative tribunals alike grapple with the question of how the pandemic has impacted, or not impacted, our established employment and labour standards. Few employment contracts and collective bargaining agreements had previously contemplated a global pandemic, leaving issues such as sick leave, employee health and safety, and work stoppage in uncertain territory. However, 2021 was not all about the pandemic (believe it or not). We continued to see growth in the areas of human rights, occupational health and safety, and termination of employment relationships.
Below we have summarized what we believe are the top 10 Canadian employment and labour cases of 2021 that employers should be aware of:
Labour arbitrators have exclusive jurisdiction over human rights disputes arising from collective agreements
In 2021, the Supreme Court of Canada made a final decision on the exclusive jurisdiction of labour arbitrators over human rights disputes that arise under a collective agreement. We previously wrote about that decision here.
The respondent employee was suspended for attending work while under the influence of alcohol, and disclosed to the employer that she had an alcohol dependency. As a result, the employer required that the employee sign a “last chance agreement” to abstain from alcohol and undergo treatment. The employee refused to enter the agreement and was terminated.
The Union grieved the termination, and the employee was reinstated. However, the employee was terminated again shortly thereafter for alleged breach of the reinstatement terms. The employee filed a discrimination complaint with the Manitoba Human Rights Commission. The employer contested the jurisdiction of the human rights adjudicator and argued that disputes under the collective agreement were the exclusive jurisdiction of a labour arbitrator. The adjudicator found that she had jurisdiction and went on to find that the employer had discriminated against the employee. This decision was judicially reviewed and ultimately appealed by the employer to the Supreme Court of Canada.
The Court reiterated the well-established principle that labour arbitrators can decide on human rights claims which fall within collective agreement disputes. Justice Brown, writing for the majority, determined that exclusive jurisdiction is guided by an analysis of the relevant legislation. To this end, various provincial labour relations legislation expressly requires that each collective agreement contain a clause which provides arbitration as the exclusive and final step for dealing with interpretation, application, or violation of the agreement.
The Court decided that a labour arbitrator will not have exclusive jurisdiction if there is another piece of legislation which includes clear language providing another tribunal with jurisdiction over the subject matter. In Horrocks, there was no counter-prevailing legislation that provided the Manitoba Human Rights Commission with jurisdiction. In other words, the Commission did not have jurisdiction to adjudicate her claim and the exclusive venue for determination was through the arbitration process.
The Court was careful to note that this decision does not necessarily preclude all workplace-related actions in the court. An arbitrator’s exclusive jurisdiction extends to human rights disputes arising from the interpretation, application, or alleged violation of a collective agreement, meaning an employee is precluded from filing a human rights complaint in relation to such matters unless the legislation specifically provides for concurrent jurisdiction.
CERB benefits are not deducted from wrongful dismissal damages – or are they?
After nearly four decades working for the Halifax Herald, a 61-year-old employee was temporarily laid off without pay in March 2020 due to the onset of the COVID-19 pandemic. The employee was originally told that the lay-off would last about three months, but rather than being reinstated, the employee was terminated three months later. The employer offered to pay the employee for an additional ten weeks, although they maintained that they were not obligated to do so. The employee claimed wrongful dismissal and sought damages.
Initially, the employer argued that through frustration of contact they had no legal obligations to the employee. Eventually, the employer acknowledged that it owed the employee some damages. However, in the meantime, the employee had begun to collect income replacement in the form of Canada Emergency Response Benefit (“CERB”) payments from the Government of Canada. The employer argued that CERB payments should be deducted from any required damages.
The federal government administered CERB to people who had to stop work as a result of the pandemic. At the time of this litigation, the government had yet to clearly set out the rules and repayment terms regarding CERB as they were focused on providing pandemic assistance to Canadians without delay. Applicants were simply told that they may have to repay the benefit if a later evaluation revealed they did not meet the necessary criteria. The court considered the existing rules regarding Employment Insurance (“EI”) and damages. EI is not deducted from damages, because if the employee is successful against the employer, the onus is on the employee to remit any benefits back to the government. The court determined that in light of the uncertainty in repayment of CERB, it should air on the side of caution and not deduct CERB from any wrongful dismissal damages.
Slater is only one of a handful of cases to determine the status of CERB within wrongful dismissal damages. Similar cases in other provinces have yielded mixed results, and some courts, particularly those in British Columbia, have concluded that CERB payments should be deducted. In Slater, the court definitively held that damages should not be adjusted to consider CERB payments. It would be unfair to deduct CERB payments from damages, especially given the fact that many of those who received CERB payments will likely have to repay them. The employee was awarded pay in lieu of 24 months’ notice, which he would be owed based on his long service, age, and the nature of his employment. As this issue has yet to come before an appellate court, the final determination is yet to come.
Human rights tribunal dismisses religious discrimination complaint from worker refusing to wear a mask
One of the most contentious issues arising from the COVID-19 pandemic are the federal and provincial mandates around mask-wearing in public places and private businesses. We previously wrote about two such decisions here and here. The Worker is the second screening decision we wrote about, published by the British Columbia Human Rights Tribunal (the “Tribunal”) regarding the mandatory requirement to wear masks in public places (the first decision we wrote about pertained to a dispute between a customer and a store). Screening decisions are rarely publicized, as they are typically sent privately to the complainant informing them if their human rights claim will or will not proceed to a hearing. When screening decisions are published, it is usually for the purposes of educating the public.
In the Worker, the Tribunal considered whether an employer discriminated against an employee on the grounds of religious belief for refusal to wear a mask. The employee was contracted to do work at a district facility. When he arrived, he refused to wear a mask and alleged it was his religious creed. The employee was subsequently terminated for refusal to wear a mask.
In a screening decision, the Tribunal dismissed the employee’s complaint and gave reasons surrounding the validity of mask mandates. The employee could not demonstrate any facts which support that wearing a mask is subjectively or objectively prohibited by any religion. They found that much of the employee’s arguments were personal and not rooted in any legitimate religious grounds.
The end result: the employee’s beliefs were not protected on the basis of religion, as they were born out of personal disagreement with mask mandates. This decision suggests an employee will face a relatively high bar in convincing a decision maker that opposition to masks or other COVID measures, such as vaccines, are actually based in a religious belief rather than some other non-protected opposition.
Employers must communicate repudiation of the employment contract in writing
The plaintiff employee was 70 years old and had worked for the employer continuously for 15 years at the relevant time. Through a text message service, WeChat, the employee indicated to his supervisor that he would be absent from work due to illness. The employee indicated this would be approximately a two-week period due to COVID isolation. However, this absence extended for a two-month period. The employee did not communicate at all with the employer during his absence. Twice throughout the two-month absence, the employer attempted to call the employee’s landline, which had been disconnected. The employer made no further efforts to contact the employee.
During the employee’s absence, the employer trained new personnel to effectively replace the employee. To the employer’s surprise after the two-month absence, the employee arrived for a regularly scheduled shift. The employer told the employee he had abandoned his job, and therefore he was no longer employed, and he was owed no compensation in lieu of notice. The employee disagreed, and alleged he was terminated without notice.
At the outset of the court’s decision, they emphasized that employment is a contractual relationship. While an employee can repudiate their employment contract through abandonment, an employer must accept this repudiation. In this case, the employer did not communicate acceptance of this repudiation. Since communication of repudiation never occurred, the employment contract remained intact. As a result, the employee was entitled to damages in lieu of notice.
The court held that an employer can accept repudiation through several methods, but importantly, it should always be done in writing. One simple way of accepting repudiation of the employment contract is by issuing a Record of Employment.
Misgendering employees is a serious ground for human rights complaints against employers
The employer operated a bar and restaurant. Four persons were employed in the kitchen of the restaurant. One employee identified as gender queer and two employees identified as non-binary. All three employees use they/them pronouns. The employees each brought a human rights complaint against their employer on the grounds of gender discrimination. The employees recounted their employer misgendering them throughout their employment. Specifically, the employees alleged there was an incident where the employer made transphobic statements to customers about his kitchen staff. Shortly after this incident, the employees ceased working at the restaurant due to the employer’s conduct and the lack of a safe and discrimination free workplace.
The employer denied these allegations and did not respond to the human rights complaint. The human rights tribunal found that the complaints of the employees were substantiated, and both the misgendering and transphobic statements constituted discrimination. Each of the employees were awarded $10,000.00 for lost wages and compensation for injury to dignity, feelings, and self-respect.
This case serves to remind employers that allegations of misgendering and transphobic environments are serious. Employers must take appropriate action to create a discrimination free workplace for gender queer, non-binary, and trans employees.
Refusal to participate in remedial action following a workplace sexual harassment investigation constitutes just cause for dismissal
The employee was a senior product designer who had been working for the employer for 20 years. The employee was accused of making sexual innuendos towards a female project manager on four occasions. An investigation was conducted and found that the comments made by the employee constituted sexual harassment. The employee was provided with a copy of the investigation report and a letter requiring him to take part in sensitivity training and give the complainant an apology. The employee accepted training but refused to apologize to the complainant, and was dismissed as a result.
The trial judge was asked to examine if the comments made by the employee constituted sexual harassment. The trial judge declined to determine if the comments constituted sexual harassment because the actual reason for dismissal was listed as “serious and wilful insubordination”, which the judge took as a reference to the employee’s refusal to issue an apology. The trial judge was also of the opinion that the investigation had never concluded that the employee’s conduct was in fact sexual harassment. The trial judge determined that the employee’s refusal to apologize did not create an irreparable breakdown in the employment relationship.
The case made its way to the Ontario Court of Appeal, where the trial decision was overturned. The Court of Appeal found, based on the workplace investigation, that the employee’s conduct definitively constituted sexual harassment. The court emphasized the seriousness of the misconduct and that the refusal to apologize created a sufficiently serious breakdown in the employment relationship to warrant termination. The court decided that though the employee was not initially terminated, a refusal to agree to the remedial efforts of the investigation constituted just cause for dismissal.
This case serves as a reminder to employees and employers alike, that sexual harassment in the workplace is a serious matter which, on its own, can justify termination. Further, a failure by the employee to accept the remedial action(s) required by the employer following a fair investigation may constitute just cause for termination, even where the original conduct was not deemed sufficiently serious.
Employee hardship during the pandemic can result in employers owing employees longer notice periods at common law
Employers should be aware that the ongoing pandemic can result in employers owing employees longer notice periods at common law. In Kraft, the employee’s position as a salesperson in the field of investment banking was terminated without cause in March 2020. The employee had worked for the company for six years and sued for pay in lieu of notice.
The employee argued that they were entitled to more notice due to the difficulties that the pandemic creates in finding employment. The court reviewed the evidence from the employee about his failed job search with over 70 job applications which were unsuccessful. The court agreed in this case, that the economic hardship of the job market should be reflected in the damages awarded to the employee. At paragraph 22, the court found that “there is evidence that the pandemic impacted on the Plaintiff’s ability to secure new employment. In light of that evidence, he deserves to receive at least somewhat above the average notice period”. The court modestly increased the notice period by one month greater than what the employee would normally be entitled, for a total of 10 months’ notice.
Though notice is examined on a case-by-case basis, employers should be aware that the pandemic can be a factor which could increase the common law notice period. We previously wrote about pandemic-related notice periods and their mixed jurisprudence across courts and jurisdictions here.
Despite the ONCA’s decision in Waksdale, the enforceability of termination provisions continues to be an evolving area of law
Last year, we listed Waksdale v. Swegon North America Inc., 2020 ONCA 391 as one of our Top Ten of 2020 (find it here). The Ontario Court of Appeal held that employment contracts, and especially termination clauses, are to be read as a whole, so that if one clause is found to be statutorily invalid (such as the just cause termination provision), all are invalid (including the without cause termination provision). This year, we saw parties to an alleged wrongful dismissal claim attempt to apply the Waksdale principles. In Rahman, the defendant sought summary judgement for a wrongful dismissal claim. The defendant is a subsidiary of the US-based Cannon Corporation and has one Canadian office located in Toronto. The plaintiff was employed at the Toronto office.
In response to COVID-19, the parent company instituted lay-offs and salary reductions, which resulted in a reduction of the plaintiff’s salary and eventually her employment was terminated without cause. The plaintiff argued that the termination provisions in her written employment agreement were void because they allegedly violated the minimum standards of Ontario’s Employment Standards Act, 2000, SO 2000, c 41 (“ESA”).
Upon her hiring in February 2016, the plaintiff had been provided with an offer letter which was specific to her position, and a general “Officer’s Agreement” which formed part of her terms of hiring. She reviewed both with a lawyer prior to accepting the position. The court quickly dismissed four of the plaintiff’s five claims on the basis that the offer letter clearly stated that it would prevail in the event of a conflict between the two documents. It was therefore unnecessary to consider arguments centering on the wording of the Officer’s Agreement where the offer letter complied with the ESA. The court was left to consider whether the “just cause” termination provision in the offer letter permitted termination without notice in circumstances beyond those permitted by the ESA. If that were the case, the plaintiff argued, then following Waksdale, the without cause termination provision would be void.
The judge found that not only was Ms. Rahman sophisticated when it came to negotiating contracts, but also that she and her lawyer had not raised any concerns with the termination provision during negotiations.
Further, Ms. Rahman had negotiated a more beneficial termination clause, which entitled her to the greater of her statutory entitlement, or two months’ pay in lieu of notice if terminated without cause in the first five years, provided she agree to sign a release. Her statutory entitlement under the ESA was only one month. The defendants argued, and the court agreed, that if it were to side with the plaintiff, the unintended effect would be to potentially allow employers to deprive employees of fairly-negotiated benefits that exceed the common law standard.
When drafting employment contracts, the best practice for employers is to include a “saving provision”, which stipulates that employment legislation standards constitute the minimum entitlement. Additionally, employers should strongly encourage potential employees to seek independent legal advice and carefully review all terms prior to signing employment contracts.
Family status protection under human rights legislation continues to be subjected to conflicting standards across Canada
This appeal stems from a judicial review of an Arbitration Board decision concerning a nurse who was denied a change in rotation based upon family status accommodation. The reviewing judge at the Alberta Court of Queen’s Bench found the Arbitration Board’s majority decision to be unreasonable, and Alberta Health Services (the employer) appealed. The Alberta Court of Appeal sought to determine the applicable test for prima facie discrimination in family status human rights cases.
The central issue involves two competing lines of jurisprudence: the general test as set out by the Supreme Court of Canada in Moore v British Columbia (Education), 2012 SCC 61, and the Federal Court of Appeal’s slightly more recent decision in Canada (Attorney General) v Johnstone, 2014 FCA 110, which builds off Moore. The general test for discrimination from Moore indicates that a complainant must show:
- They have a characteristic protected from discrimination;
- They experienced an adverse impact on account of the challenged norm; and
- The protected characteristic was a factor in the adverse treatment.
However, that test has not necessarily been strictly followed in “family status” discrimination cases, which looks at discrimination based on a parent-child relationship.
In Johnstone, the Federal Court considered a case where an employee alleged discrimination on the basis that the employer failed to accommodate as necessary to meet childcare needs. The Federal Court decided that discrimination would only be established “…if the employee has sought out reasonable alternative childcare arrangements unsuccessfully and remains unable to fulfil his or her parental obligations”. Many have pointed out that this imposes a self-accommodation standard on the employee not contemplated by the Moore test.
Since Johnstone, many arbitrators across Canada have begun to apply the new, more onerous standard in family status cases while others have adopted modified approaches. The Alberta Court of Appeal clarified the issue for tribunals in Alberta and decided that Moore is the proper test, and Johnstone has no legal justification or imposition. The court found that the Moore test provides certainty and uniformity, whereas the Johnstone test is “fundamentally flawed”. In dismissing the appeal, the court found that “imposing a more onerous self-accommodation burden in this manner perpetuates rather than ameliorates human rights inequality.”
It will be interesting to see if other jurisdictions follow Alberta on this matter, as jurisdictions across the country continue to rely upon Johnstone as well as other modified tests. Until there is clarification from the Supreme Court of Canada, both employers and claimants may continue to be subject to uncertainty and potentially differing standards in litigating family status cases.
Case law developing on workplace vaccine mandates produces mixed results
Increasingly workplaces in Canada have begun to implement mandatory COVID-19 vaccination policies. In November 2021 we canvassed two early arbitrations where unions challenged mandatory workplace vaccine policies (found here). We have chosen these two cases to demonstrate the mixed arbitration results of mandatory workplace vaccination policies.
In United Food and Commercial Workers Union, Canada Local 333 v Paragon Protection Ltd the employer implemented a policy where all workers had to be fully vaccinated, subject to any valid human rights exemptions. The employer was a security company, employing 4,400 security guards across 450 sites in Ontario. The union grieved the policy, alleging that it breached the collective agreement, labour relations legislation, and the human rights code. The arbitrator found that the policy was reasonable and enforceable. The arbitrator made a number of significant findings that supported the policy including that it was created in recognition that most of the sites where the employer provided services already had their own mandatory vaccination policies. Further, the collective agreement already contemplated that the employer could require employees to be vaccinated for certain job sites and that employees may generally be required to be inoculated. Overall, the arbitrator found that the policy struck a balance in providing a safe workplace because it still allowed for valid vaccine exemptions.
In Electrical Safety Authority v Power Workers’ Union, the mandatory workplace vaccination policy was not upheld by the arbitrator. The arbitrator warned that this decision is not about the merits of being vaccinated or the effectiveness of vaccination against COVID-19. They emphasized that the science is clear that COVID-19 vaccines are safe and effective at reducing the likelihood of serious illness or death, particularly with respect to the Delta variant. However, the arbitrator found that the policy represented a significant over-reaching of management rights, as unvaccinated employees were subject to discipline up to and including termination. The arbitrator found that the employer’s regular testing and masking policies were already effective at reducing the risk of workplace transmission, and the majority of employees had continued to work remotely. If there was a client that required a vaccinated employee, the employer was able to schedule to meet this requirement. Overall, the arbitrator found there was no evidence that the unvaccinated employees created real problems for the company’s business. The arbitrator warned that this analysis was subject to the present conditions of the pandemic, and at another point in time it could be considered reasonable.
While both cases are early decisions, they demonstrate that mandatory vaccination policies are assessed on a case-by-case basis and are largely fact-specific. However, in consideration of the recent exponential increase in COVID-19 cases, stronger government mandates, and more evidence that vaccines reduce hospitalization, these cases should not necessarily be taken as how decisions will be resolved today. Mandatory workplace vaccination policies continue to be a live issue in employment and labour law. With the increasing spread and prevalence of the Omicron variant, we are interested to see how the case law further develops. We encourage employers to consider their approach to vaccine mandates and reach out for advice.
This article was written with assistance from Leah Robertson, an Articled Clerk in Cox & Palmer’s Halifax office.