COVID-19 Case Round-Up

As increasing vaccination rates signal the possible end of the pandemic, legal cases are beginning to work their way through Canadian courts and tribunals.  This article summarizes a few of the recent and important cases considering pandemic-related labour and employment issues.

1.               Breach of COVID protocols may be cause for dismissal

Given the speed at which expedited arbitrations can move to hearing, labour arbitrators have been the first to consider whether breaches of COVID-19 protocols amount to just cause for dismissal.  These decisions are not binding on courts considering wrongful dismissal claims, but they may provide some guidance.

In Labourers’ International Union of North America v. Aecon Industrial, a Division of Aegon Construction Group Inc. (Wynne Grievance), [2020] O.L.A.A. No. 292, Arbitrator Carrier found that dismissal was appropriate for an employee who reported for work despite being instructed to remain home as a result of COVID-19 symptoms.  The Arbitrator noted that the employee had two previous safety violations and exhibited a “deliberate and cavalier attitude toward the COVID safety risks he represented… [which] was unconscionable, unreasonable and totally unacceptable.”

In Trillium Health Partners v. Canadian Union of Public Employees Local 5180 (Faryna Grievance), [2021] O.L.A.A. No. 4, a hospital employee was suspended for five days for sending a secret recording of a meeting about COVID protocols to the media.  After returning, the employee participated in a “pizza party” at the hospital (despite being directed not to bring in shared food) and was fired.  The arbitrator found that the suspension was justified, but the termination was a disproportionate response to the party given the lesser penalties imposed on the other participants.  With that said, the arbitrator found that the employee should be reinstated without any back pay, which resulted in an unpaid suspension of more than five months.

In Garda Security Screening Inc. v. IAM, District 140 (Shoker Grievance). [2020] O.L.A.A. No. 162, Arbitrator Keller upheld the termination of an employee who reported to work while awaiting COVID-19 test results, in breach of the employer’s guidelines.  The employee later tested positive for COVID-19, highlighting the reason for the guidelines.

These cases demonstrate that arbitrators treat breaches of COVID-19 rules as serious infractions which may amount to just cause for dismissal.  As with all termination cases, the analysis is highly fact-specific and arbitrators (and courts) will look at the whole context to decide whether the employee’s infraction has irreparably damaged the employment relationship.

2.               Being anti-mask is not a human rights issue

The BC Human Rights Tribunal has dismissed complaints from individuals who complain about mask rules, but do not allege a disability or other protected ground.  In an effort to stem the rising tide of cases (more than 500 to date), the Tribunal has published some of its screening decisions.

On March 31, 2021, the Tribunal published The Customer v. The Store, 2021 BCHRT 39.  The complainant refused to wear a mask and was denied entry to a grocery store.  The complainant refused to provide any detail about the nature of her alleged disability beyond the fact that wearing a mask made it difficult to breathe and caused anxiety.  The Tribunal found that this was insufficient:

[14] The Code does not protect people who refuse to wear a mask as a matter of personal preference, because they believe wearing a mask is “pointless”, or because they disagree that wearing masks helps to protect the public during the pandemic. Rather, the Code only protects people from discrimination based on certain personal characteristics, including disability. This protection is reflected in exemptions to mask‐wearing rules for people whose disabilities prevent them from being able to wear a mask or other face covering. Any claim of disability discrimination arising from a requirement to wear a mask must begin by establishing that the complainant has a disability that interferes with their ability to wear the mask.

….

[17] …there is no question that when a person files a human rights complaint with this Tribunal, they must set out facts which could, if proven, establish that they have a disability. Without a disability, they are not entitled to accommodation or any potential remedy for discrimination under the Code. It is not enough, as the Customer has done in this complaint, to simply say that “specific mental and physical disabilities are private matters”. As this Tribunal has said, “Parties before the Tribunal, like those before the courts, face an inevitable loss of privacy with respect to the matters in issue between them”: Sinclair v. Blackmore and others, 2004 BCHRT 37at para. 29. The Customer’s refusal to explain whether she has a disability, and how that disability impacts her ability to wear a mask, means that she has not set out facts which could, if proven, establish discrimination. The Tribunal will not proceed with the complaint.

Shortly thereafter, on April 8, 2021, the Tribunal published The Worker v. The District Managers, 2021 BCHRT 41, which dealt with an employee who refused to wear a mask, allegedly due to religion.  The Tribunal noted:

He [the Complainant] has not pointed to any facts that could support a finding that wearing a mask is objectively or subjectively prohibited by any particular religion, or that not wearing a mask “engenders a personal, subjective connection to the divine or the subject or object of [his] spiritual faith” … Rather, his objection to wearing a mask is his opinion that doing so is “arbitrary” because it does not stop the transmission of COVID‐19. As set out in The Customer, that view is not protected under the Code.

In both cases, the complainants failed to allege facts that, if true, could support a breach of the Human Rights Code.  We understand that the Tribunal is in the process of dismissing hundreds of anti-mask complaints and has established a special process for mediating those that are permitted to proceed.

3.               Mandatory COVID testing might be reasonable in a health care setting

Unionized employers are likely familiar with the “KVP Test”, which requires that (amongst other things) policies unilaterally imposed by an employer be “reasonable”.  In situations involving employee testing (for drugs, alcohol, or COVID), arbitrators consider the employer’s purpose for collection and balance it against the employees’ right to privacy. In Caressant Care Nursing & Retirement Homes v. Christian Labour Association of Canada, 2020 CanLII 100531 (ON LA) the employer operated a retirement home and required mandatory testing for COVID-19 every two weeks.  The arbitrator held that the employer’s policy was reasonable given the potential serious consequences of a COVID-19 outbreak at the retirement home.

4.               A layoff without consent is usually a constructive dismissal  – but maybe not in Ontario

COVID-19 and related health orders forced thousands of employers across the country to quickly reduce their workforces.  While provincial governments were quick to provide some protection from statutory termination liabilities in the form of lengthier permitted layoff periods under employment standards legislation, the law (at least pre-COVID) is such that a temporary layoff is still a “constructive dismissal” unless the employee consents to the layoff or the employer’s right to lay-off employees is a term of the employment contract.

The Ontario government went further than most provinces by enacting a regulation to the Employment Standards Act, 2000 (the Infectious Disease Emergency Leave Regulation) which provided that a reduction or elimination of hours of work for reasons related to COVID-19 was not a constructive dismissal.  At the time it was enacted, many practitioners were of the view that this regulation did not alter the “common law”, meaning that while a COVID-19 layoff may not have been a constructive dismissal for statutory purposes, it was still a constructive dismissal at common law.  Three Ontario judges have now ruled on this important issue, but their decisions are not consistent.

In Coutinho v. Ocular Health Centre Ltd., 2021 ONSC 3076, the court found that the regulation did not remove an employee’s common law right to sue for constructive dismissal because the Employment Standards Act, 2000, specifically states that nothing in the legislation affects an employee’s civil remedies.

In Taylor v. Hanley Hospitality, 2021 ONSC 3135, the court found the opposite: the regulation had the effect of removing an employee’s right to sue for constructive dismissal at common law.  In that case an employee was laid off in March 2020 and recalled (and returned to work) in September 2020.  The judge explained that, in his view, Coutinho was wrongly decided because it was open to the government to displace the common law by regulation.  The judge found that it would be absurd that the employee could be on a leave of absence for statutory purposes, but terminated at common law.

In Fogelman v. International Financial Group, 2021 ONSC 4042, the court found that a layoff permitted by the regulation was a constructive dismissal.  The judge relied on the same reasoning adopted by the judge in Coutinho and also pointed out that the government’s own briefing stated that the regulation was not intended to address what constitutes a constructive dismissal at common law.

As of the date of this article, two judges in Ontario have found that a layoff permitted by statute was still a constructive dismissal at common law, and one has found the opposite.  We understand that both the Coutinho and Taylor cases are being appealed.  There have been no decisions addressing the argument that layoffs caused by COVID represent frustration of the employment agreement in which case no damages are owing.

5.               CERB payments might be deductible from wrongful dismissal damages

In response to the pandemic, the federal government created the Canada Emergency Response Benefit (CERB) which paid employees affected by the pandemic up to $500 a week for up to 28 weeks.  Unlike EI, CERB did not require employees or employers to pay into the program.  At least four judges from different provinces have now considered whether CERB benefits should reduce an employer’s exposure to wrongful dismissal damages.  For comparison, we note that EI benefits do not reduce an employer’s exposure to damages because the benefits must be repaid by an employee who subsequently receives damages for the same time period.

The first court to consider this issue was the Ontario Superior Court in Iriotakis v. Peninsula Employment Services Limited, 2021 ONSC 998.  In that case, the court found that CERB benefits should not be deducted from wrongful dismissal damages payable by the employer.  The court noted that the CERB benefits were considerably less than the employee’s salary and commission income he otherwise would have earned had he worked through the notice period and it would not be equitable to reduce his damages by the amount of the CERB payments.

In Hogan v 1187938 B.C. Ltd., 2021 BCSC 1021, the BC Supreme Court reached the opposite conclusion and found that CERB benefits should reduce the amount of damages payable by the employer from wrongful dismissal.  The court noted that CERB benefits were different than EI benefits because CERB benefits did not need to be repaid and neither employer nor employee directly contributed to them (they were not a form of deferred compensation).  CERB benefits were a type of wage-loss indemnity which the employee only received because he had been dismissed.  The court distinguished Iriotakis on the basis that, in that case, the terms of the employee’s contract meant that he was not eligible for damages for lost commissions over the notice period.  Thus, in Iriotakis, the employee was still “worse off” by reason of his dismissal, and there was no overcompensation problem if he received damages and CERB.  In Hogan, the court found that issue did not arise and there was no reason to depart from the general rule that damages should not place the employee in a better position than he would have been had he not been wrongfully dismissed.

In Fogelman v. International Financial Group, 2021 ONSC 4042, another Ontario judge found that CERB benefits should not be deducted from wrongful dismissal damages.  The judge relied on the decision in Iriotakis and also noted that the Minister of Employment and Social Development was empowered under the CERB legislation to require repayment of CERB from a person who received a payment to which they were not entitled.

Even more recently, in Slater v. Halifax Herald Limited, 2021 NSSC 21, the Nova Scotia Supreme Court refused to deduct CERB payments from wrongful dismissal damages.  The judge found that the logic in Hogan was “difficult to disagree with” but that “the understanding of CERB seems to be developing”.  The judge noted that the purpose of CERB was to cushion the blow of lost income for employees and not to help shield employers from wrongful dismissal liability.  The judge pointed out that there were programs in place to help employers too.  On the basis that CERB payments might have to be repaid as a result of a damages award, the judge found that CERB payments should not be deducted.

In the author’s respectful view, the federal government could put this debate to rest by publishing clear guidance on whether CERB payments will need to be repaid as a result of a recipient subsequently receiving wrongful dismissal damages.  At this time, there is no such guidance nor does the legislation expressly require repayment in those circumstances.

Subject to further guidance from the federal government or a decision from a court of appeal, we expect that the Hogan case will continue to be applied in British Columbia and CERB will generally be deductible from wrongful dismissal damages in this province.

Cases considering COVID-19 issues will continue to be issued for the foreseeable future.  Subscribe to our newsletter for the latest news and information for employers.