2019 Year in Review

As Stuart has often said, “you would think that by now, the law of employment would be relatively settled”. And yet here we are in 2020, and that is still not true. The reality is that the law regarding fundamental issues like contracts and severance continues to evolve and involve a level of uncertainty that can be quite frustrating for those involved.

This review was prepared in early 2020 but its publication was preempted by the dramatic turn of events in early March which impacted all aspects of our society. As we begin to “get back to business”, we thought it might be time to look back at the most significant Employment Law developments of 2019.

As a perfect example of the law still not being settled, the COVID-19 pandemic has caused substantial debate regarding how to apply long-standing legal principles, such as constructive dismissal, to such unprecedented circumstances. A temporary layoff or wage cut, without the contractual right to impose it, has always constituted constructive dismissal. And yet that would leave many employers in an untenable situation, prompting arguments that the law will have to change. How that will be resolved remains to be seen.

Significant Developments in Employment Law During 2019

As is usually the case, the list of significant developments in employment law in 2019 could go on and on, but we have limited ourselves to our Top Ten. Many of these were discussed by Rudner Law during the year.

No Accommodation Without Participation

In Peternel v. Custom Granite & Marble Ltd., the Ontario Superior Court of Justice confirmed that if an employee does not cooperate in the accommodation process, they may not be able to prove discrimination.

In that case, the Court held that by failing to provide the employer with important information regarding her childcare needs, the employee frustrated any efforts that the employer might have been able to make to accommodate her needs.

The Court reaffirmed that:

“… accommodation is a “joint process” which requires the applicant to co-operate with the employer in the accommodation process by providing the employer with information concerning the family-related needs and working with the employer to identify possible solutions.” (Click here for our full review of this decision)

In Provincial Health Services Authority and HSA BC (Kozak), Re, a British Columbia Arbitrator held that by failing to provide her employer with medical information to substantiate her lengthy absence from work, the employer was justified in terminating her employment for cause.

The arbitrator held that the grievor’s length of service and the special economic hardship a termination would cause (potential foreclosure on her house) were all mitigating factors in her favour. However, the arbitrator was not persuaded that reinstatement, even with some conditions, would be a viable option. The conditions would involve providing medical information at the very least and Kozak made it clear by her actions and during her testimony, that she would not under any circumstances provide medical information.

This case also confirms that in many cases, the employee’s response can make the difference between a finding of just cause and a conclusion that the employee deserves another chance.

Sex Addiction is not a Disability

In the case of Unifor, Local 2215 and I.M.P. Group Ltd. (AB), Re, the grievor’s employment was terminated for cause after he ignored his employer’s warning to cease masturbating in the employee washroom. The grievor brought an action for wrongful dismissal. In defence of his behaviour, the grievor claimed that he suffered from a sex addiction and therefore his employer had a duty to accommodate him. In aid of this argument, the grievor provided a report prepared by his therapist.

The court rejected the grievor’s argument that he suffered from an addiction, namely a sex addiction. Having reviewed and considered the resume, report and testimony of the therapist, the court was not persuaded that the therapist was qualified to offer an opinion as to whether sex addiction existed as a condition or disability; or that the grievor suffered from it.

The court concluded that masturbation was a fairly common (and normal) habit and there was nothing to suggest that the grievor’s practice of it (other than his proclivity to do it at work) fell outside of the norm.

The court also concluded that even if masturbation was an addiction and the grievor did suffer from it, there was no evidence that the grievor’s ability to perform his tasks and duties at work were in any way affected. Therefore, the employer would not be under any duty to accommodate him.

There is a 24 Month “Cap” on Reasonable Notice…Usually

Recent times had seen several instances of cases breaking the so-called 24 month cap on reasonable notice of dismissal at common law, fueling a perception that inflation had caused the cap to increase. However, in Dawe v The Equitable Life Insurance Company of Canada, the Ontario Court of Appeal confirmed that:

• any determination of a notice period is fact and case specific;
• there is no absolute cap on notice periods; but
• notice periods of 24 months must be supported by exceptional circumstances.

Initially, in that case, the motions court Judge awarded the Plaintiff 30 months’ notice and made it clear that they would have awarded 36 months if the Plaintiff hadn’t limited the remedy sought to 30 months in his Statement of Claim.

The Court of Appeal reduced the notice period to 24 months and reaffirmed that in the absence of “exceptional circumstances”, an upper limit of 24 months still applies to awards of reasonable notice.

Refusing to hire someone that is not Eligible to Work in Canada on a Permanent Basis is Discriminatory – even if they lie in the application process.

We have written about Haseeb v Imperial Oil Limited several times. In 2018 the Ontario Human Rights Tribunal confirmed that an employer’s hiring policy which required a job candidate to demonstrate that they were legally eligible to work in Canada on a permanent basis constituted direct discrimination on the basis of citizenship. Notably, the fact that the applicant was dishonest in the hiring process was not deemed to be a valid reason for the refusal to hire him since he only lied because he knew of the discriminatory requirement.

In 2019, the Tribunal denied the respondent’s request for reconsideration and rendered its decision on remedy. Having found that it was more than likely that the applicant’s employment would have been long-term, the tribunal awarded lost income over a period of over four years, up to the date of the hearing.

The Tribunal held that “it is well-established that in human rights cases, an award for lost income is not limited to the period of reasonable notice, as in a wrongful dismissal claim, but extends over such period of time as is required to restore an applicant to the position they would have been in but for the discrimination…”

No Independent Tort of Harassment

To the surprise of many, in Merrifield v. Canada, the Ontario Court of Appeal declined to recognize the tort of harassment. The Court noted that there was no legal authority supporting the recognition of the tort of harassment and no basis for recognizing a new tort of harassment at this time.

The application for leave to appeal from that judgment was dismissed by the Supreme Court of Canada.

Life in the Post-#metoo era: Hiring a Former Sexual Harasser could be Constructive Dismissal

In the wake of the #metoo movement, many individuals lost their jobs and careers due to allegations of sexual harassment. However, how should employers react when those individuals attempt to return to the workforce? In Colistro v Tbaytel 2019 ONCA 197, the Ontario Court of Appeal confirmed that in the right (or wrong) circumstances, hiring that candidate can constitute a constructive dismissal of other employees.

The Appellant was employed by the Respondents as an administrator. In January 2007, the Respondents announced that they were hiring a new Vice-President of Business Consumer Markets, Steve Benoit (“Mr. Benoit”). The Appellant advised the Respondents that as a result of the announcement, she was “not eating or sleeping, was vomiting and on the verge of a nervous breakdown”. She also provided a note from her doctor advising that she would be off work due to stress.

The Respondents made inquiries into the circumstances surrounding Mr. Benoit’s termination from its predecessor and discovered that there had been allegations of sexual harassment made against him. Although Mr. Benoit had not been interviewed when the investigation was conducted and his employment was not terminated for cause, the complaints of sexual harassment were part of the reason for his dismissal. Despite this discovery, the Respondents nevertheless decided to hire Mr. Benoit.

In the circumstances, the Court found that “a reasonable person would see [Colistro’s] continued employment as intolerable” and concluded that she had been constructively dismissed by the Respondents.

This case is also a reminder that plaintiffs who over-reach in their claim can be on the hook for costs, even if they are successful. Despite being successful in her claim for constructive dismissal, the Appellant was ordered to pay the Respondents $200,000.00 in costs. This is because she was unsuccessful in her claim for intentional infliction of mental suffering, and the damages she ultimately received amounted to less than 4% of the amount she claimed. In the circumstances, the Court found that the Respondents were the substantially successful parties.).

Loose Lips…The High Costs of Breaching Confidentiality of a Settlement Agreement

We are often asked about what happens if someone breaches the confidentiality covenant in a settlement agreement. It rarely happens, but in Acadia University and The Acadia University Faculty Association (Mehta Grievance), an Ontario arbitrator ruled that the respondent was no longer required to honour the settlement agreement because the grievor had breached the confidentiality clause by posting about the agreement on twitter. The arbitrator held that “settlements in labour law are sacrosanct and given the repeated and continuing breaches, together with the absence of any mitigating circumstance or explanation, … the University is no longer required to honour the payment provision.”

Still more Changes to the Ontario Employment Standards Act (“ESA”)

As we reported last year, Ontario has seen more than its share of changes to its employment standards legislation over the past few years. In 2017, the Fair Workplaces, Better Jobs Act, 2017 (“Bill 148”), which drastically overhauled the ESA, was introduced. Many of these changes to the ESA came into effect in 2018, forcing employers to swiftly amend their policies and practices to remain compliant. However, in October 2018, the Making Ontario Open for Business Act, 2018 (“Bill 47”) was introduced, which repealed or rewrote many provisions of Bill 148, including sick leave, medical documentation and performance management. Many of these changes came into effect in 2019.

Highlights of the Changes to the Ontario Employment Standards Act:

Changes to the federal employment standards legislation too

Every jurisdiction in Canada has its own employment standards legislation, and employees that work in federally-regulated undertakings are governed by the Canada Labour Code. On September 1, 2019, several changes to the Canada Labour Code came into force that impact items such as rest periods, vacation and vacation pay and leaves of absence.

Some highlights from the changes to the Code include:

• entitlement to unpaid breaks of at least 30 minutes during every period of five consecutive hours of work
• entitlement to unpaid breaks if required for medical reasons – including taking medication or for exercise
• entitlement to unpaid breaks for nursing a child or expression of breast milk – no medical certificate is required
• increase in vacation pay and vacation requirements
• elimination of the minimum service requirement for certain leaves of absence – including maternity leave, parental leave and medical leave
• entitlement to at least 96 hours’ (4 days) notice of work schedule
• entitlement to at least 24 hours’ notice of a shift change

Changes to the Small Claims Court and the Rules of Simplified Procedure

In 2019, the Attorney General for Ontario announced changes to the jurisdictions of the Small Claims Court and the Simplified Procedure which came into effect on January 1, 2020. As of that date, the jurisdiction of the Small Claims Court increased from $25,000 to $35,000, and all claims between $35,000 and $200,000 must be brought under Rule 76 (the Simplified Procedure). from $100,000.00 to $200,000.00 (in addition to other changes). These changes are intended to make litigation easier, faster and more affordable for litigants.

Conclusion

That’s all for this review, and we apologize for the delay in finalizing and disseminating it. As usual, the law continues to evolve, and it is critical that individuals and organizations understand their legal rights and obligations before taking action. Most of the issues we see occur due to a lack of information. We can help you to make informed decisions.

We can only imagine what the 2020 review will be like.