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2022 – The Year in Employment Law, Part Two

Updates and Announcements

The Lasting Effects of COVID-19

Are we done with COVID, or will another variant dash our hopes yet again? Or, perhaps most likely, will we simply continue to move forward but never be entirely “done” with COVID-19?

We know that the pandemic raised many interesting legal questions, forcing our legal system to apply age-old concepts to novel and unprecedented (there’s that word again) circumstances. Many of those issues are slowly making their way through the courts. In last year’s Year in Review post, we indicated that three major questions remained unanswered:

  1. Whether putting an employee on a temporary layoff or leave due for COVID-19 related reasons is a constructive dismissal;
  2. Whether the Pandemic has an impact on an employee’s entitlement to reasonable notice; and
  3. Whether an employer may implement a vaccine mandate, and the consequences if an employee refuses to follow it. 

A year later we still have no definitive answer to these questions, but things aren’t static: some progress has been made. We now have other issues to address, such as who gets to decide where work is done; can employees insist on working remotely, or can organizations mandate a full or partial return to the workplace?

First, some updates on the “older” issues:

Temporary Layoffs and Constructive Dismissal Redux

In Ontario, the question of whether putting someone on the Infectious Disease Emergency Leave (the “IDEL”) was a constructive dismissal for purposes of the common law remains unanswered. As we have previously written about, three cases have worked their way through the court system. In April the Court of Appeal for Ontario heard arguments in Taylor v Hanley Hospitality Inc. and the Ontario employment bar was abuzz with the prospect of appellate guidance on the subject. Unfortunately for all concerned, as we wrote about in May, the Court did not provide any guidance, and in fact explicitly refused to do so. Instead, the Court struck the trial judgment on procedural grounds, and returned it to the trial Court for further review.

As of the end of 2022, two lower-court judgments say that putting someone on IDEL was a constructive dismissal, and none say that it was not. The Court of Appeal has yet to offer any guidance. As we have often said, these cases will be decided on a fact-specific basis; there will not be one rule that applies to every situation. 

The Pandemic and Notice Periods

Courts continue to apply a “pandemic bump” to calculating an employee’s entitlement to reasonable notice, and we now have appellate authority to bolster this position. At trial in Pavlov v. The New Zealand and Australian Lamb Company Limited, the Court awarded the employee a notice period of ten months, inferring the negative impact of the pandemic on the employee’s ability to find work. The Court of Appeal upheld this decision, and confirmed the ten month notice period. Read Stuart Rudner’s blog on this case.

Vaccine or Mask Mandates and Dismissals

We have written at length about the legality of introducing a vaccine mandate in the workplace. The rule appears to be that in order to be justifiable, a vaccine mandate must be rationally connected to the performance of the job, and include a process for claiming an exemption (more on that below).

At the start of 2022, two questions remained unanswered:

  1. Where an employee refuses to comply with their employer’s vaccine or mask mandate and is put on an indefinite leave of absence, have they been constructively dismissed, or have they resigned? 
  2. Similarly, would an employee’s refusal to comply with their employer’s vaccine or mask mandate form the basis for a cause dismissal?  

2022 brought some guidance on both of these questions – but nothing definitive.

Mandates and Constructive Dismissal

In Benke v Loblaw Companies Limited the employee refused to comply with the employer’s mandatory masking policy and was placed on a unpaid leave of absence pending his compliance. After a period of time off work he claimed to have been constructively dismissed, and sued seeking reasonable notice. He was unsuccessful, with the Court finding that the employer’s mask mandate was reasonable and did not constitute a significant change to the employee’s employment – they still had the same duties; they just had to perform them wearing a mask. Somewhat more surprisingly, the unpaid leave was not deemed to be a constructive dismissal as, effectively, the Court found that it was the result of the employee’s decision not to wear a mask. Ultimately, the employee was deemed to have abandoned his employment.

In Parmar v Tribe Management, the employee refused to comply with the employer’s vaccine mandate and was placed on an unpaid leave of absence pending her compliance. After a period of time off work she claimed to have been constructively dismissed and sued seeking reasonable notice. The employee was unsuccessful, with the Court finding the vaccine mandate was reasonable in the circumstances. The Court also held that a reasonable employee would not have seen the unpaid leave of absence as a substantial alteration of the employment agreement as nearly everyone else at the employer got vaccinated. It is important to note that the decision may be different in other circumstances, particularly where employees can work without being in close proximity to colleagues, customers or suppliers.

On January 19, 2023, the Court released its decision on costs in Parmar. The employer sought its costs on a party and party basis (based on British Columbia’s fee schedule)  for all steps taken in this litigation up to and including May 31, 2022, and “double costs” for all steps taken in the proceeding after May 31, 2022. The Court noted that the employer had made an offer to settle the matter for $40,000.00 on May 31, 2022, which the employee rejected. In her costs submissions, the employee claimed that her matter was novel and a matter of public interest. On this basis, the employee asserted that the Court should exercise its discretion and award no costs against her. The Court rejected this assertion, noting that the employee had conducted the litigation as a private breach of contract case. The Court found the offer to settle a reasonable one that the employee ought to have accepted – and ordered the employee to pay the employer “double costs” from the date of the settlement offer to the end of trial.   

Mandates and Just Cause

In Fraser Health Authority and British Columbia General Employees Union, the employer, a health care provider, implemented a vaccine mandate. An employee refused to comply with this mandate and their employment was terminated, for cause. Their union grieved the dismissal and was unsuccessful, with the Arbitrator finding that the employee had rendered themselves unable to work by refusing to comply with the vaccine mandate. The Arbitrator also found that there was no prospect of the employee complying with the mandate based on their conduct and thus no need to place them on unpaid leave.

Despite acting as road markers for the way things may be going, none of these cases are definitive answers to these questions – particularly for an Ontario-based employer. Benke and Parmar are both trial level decisions from outside of Ontario and Fraser Health Authority is a fact-specific decision of a labour arbitration. None of these act as binding law. In other words, we are getting there, but we aren’t there yet.

Further COVID-19 Matters

Multiple arbitration decisions have confirmed that a vaccine mandate will be valid where this includes a process for seeking an exemption to the mandate. Recognized bases for exemptions include medical and creed based reasons.

In 2022, several parties successfully challenged their employer’s vaccine mandate on creed (religion) based grounds. In Public Health Sudbury & Districts v Ontario Nurses’ Association, the employee refused to comply with the employer’s vaccine mandate on religious grounds, with the employee citing her faith as a Roman Catholic as her basis. The matter went to arbitration, with the Arbitrator upholding the employee’s claimed exemption. This was despite Pope Francis and the Catholic Church espousing COVID vaccines and the employee’s grounds for refusing being based on a fundamental misunderstanding of the science involved in the production of the vaccine.

What to Expect in the Year Ahead

We expect to see a substantial amount of COVID-related litigation, including legal battles over whether the decisions to place employees on temporary layoff or IDEL constituted constructive dismissals. Many of us were waiting for the Court of Appeal’s decision in Taylor to provide guidance on this issue, but since they chose not to, the outcome of the pending cases remains uncertain. Given the two year limitation period, many of these potential claims have commenced and will work their way through the Court system.

As we have said many times, the question of whether a refusal to comply with a mask or vaccine mandate constituted a basis for just cause is likely to be assessed on a case-by-case basis. Cases are certainly working their way through the legal system and at some point some will be addressed by the courts.

Other matters may soon lead to some interesting litigation. Despite companies continuing to function as normal while their operations were remote during the pandemic, a number of employers are beginning to call employees back to the office. Employees may object to this – and claim that the return to the office is a fundamental change to their employment. We may see a spate of constructive dismissal claims on this basis. The transition to remote work may have facilitated cases of ‘time theft’, resulting in for-cause dismissals. Nadia Zaman recently discussed a recent decision from British Columbia where an employee working remotely was dismissed for time theft.

The dramatic rise in the demand for flexibility regarding where work is performed, combined with a potential recession, is likely to lead to more tension and, as a result, more litigation.

The media’s improper characterization of the policy on disconnecting from work as a “right to disconnect” may also lead to litigation. Employees who received their information from the media about this policy and their new “rights” under it may find themselves dismissed for objecting to after-work contact by their employer.

On the COVID-19 front, many employers have done away with mask and vaccine mandates and have called people back to work. However, past actions will still lead to litigation as cases make their way through the courts. The pandemic, however, is far from over, and the potential for workplace outbreaks remains as real as ever. An employer’s obligation under the relevant occupational health and safety statute to take every precaution reasonably necessary to ensure the safety of its work environment remains the same. Whether this will extend to a return to a mask or vaccine mandate remains to be seen – but may be a subject of litigation in the near future.

Finally, the prospect of a recession on the horizon means that companies are seeking to address the bottom line – this will usually come with a review of staffing requirements and large-scale dismissals. This has already started at a number of high profile employers and may increase as the year goes on. The law regarding dismissals.

As always, it is safe to say that this year should be an interesting one when it comes to HR Law.

We will continue to work with new and existing clients to help them understand their rights and obligations and to make proactive, strategic decisions. As always, whether it is an issue related to Covid-19 and the workplace, or something else entirely, our team is available to help.

What has never changed is that much of our work is the result of people making assumptions about their rights instead of informed decisions, and the failure to treat employment relationships as the legal relationships they are. These have led to our commonly-uttered phrase:

“If you think you might need an employment lawyer, you probably do”.

Other Blogs

Stuart and others on the team at Rudner Law are frequent contributors to the following sites: 

First Reference Employment Law Resources
Canadian HR Reporter Blog
Rudner Employment Lawyer in the Lawyer's Daily
Legal Matters Employment Law Canada

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Fire Away! The Employment Law Show

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