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August 9, 2021

Notable pandemic employment and labour law cases that changed the legal landscape in the workplace

The pandemic will be remembered through many lenses. The global death toll recently surpassed a staggering 4.2 million people and counting. The pandemic wreaked havoc on the global economy and continues to cause fluctuations when new variants cause outbreaks. It tests the collective resolve of every community on every continent. COVID-19 also tests the law as courts grapple with novel situations in the workplace. In this report, we review some of the notable employment and labour decisions that impact Canadian employers.  

Reasonable Notice

Disagreements between employees and employers regarding the appropriate dollar value of wages in lieu of notice gained a new dimension in the pandemic. Although some provincial pandemic response legislation has altered certain standards for notice and leave, the common law has addressed the gaps. The courts have provided some guidance in this area over the course of the past year.

In Marazzato v. Dell Canada Inc. and Iriotakis v. Peninsula Employment Services Limited, the court noted that if one is relying on COVID-19 in an attempt to gain further wages in lieu of notice, there must be a specific demonstration of how it has affected one’s job search. At the time of the termination in Iriotakis, the court recognized that much of the pandemic’s impact was speculative, and so did not weigh it highly in determining an appropriate notice period. Marazzato determined that the downturn caused by COVID-19 may factor into the calculation of reasonable notice, but would not presumptively outweigh other factors germane to determining notice without evidence of its significance.

Yee v. Hudson’s Bay Company adds to this discussion. In this case, the employee’s employment had been terminated right before the pandemic began. The court accepted that terminations occurring before the pandemic should not be treated the same as terminations beginning after the pandemic. In short, it affirmed that the reasonable amount of notice is impacted only by the circumstances at the time of termination — not those thereafter.

In summary, the pandemic has added another factor to a list of variables considered when reasonable notice is in dispute. Canadian courts have approached this issue in the same measured, fact-specific way that characterized this area of law prior to the pandemic. Even though employers may be subject to the imposition of longer notice periods on account of the pandemic, the basic tenets of reasonable notice remain intact.

Constructive dismissal  

As discussed in the article "Demystifying Constructive Dismissal," constructive dismissal occurs where an employer’s conduct demonstrates that they no longer intend to be bound by the employment contract. It is expressed in one of two major ways: when an employer unilaterally changes or breaches a term of the employment agreement in a serious way; or when an employer’s conduct would, in an objective assessment, indicate that the employer no longer wishes to have the employee in their organization by making work conditions unbearable.

The effects of COVID-19 have had a pronounced impact on the law surrounding layoffs and constructive dismissal. Early on during the pandemic, Ontario’s Infectious Disease Emergency Leave Regulation (IDEL) was put in place to address the pandemic and circumstances where employee wages or hours were temporarily reduced (and for hours, this exception includes eliminated) for COVID-19 reasons. However, the Ontario courts have interpreted and applied this regulation in varying ways.

In the Ontario case of Coutinho v. Ocular Health Centre Ltd., the employee, Ms. Coutinho, worked for the defendant Ocular Health Centre as an office manager, and a dispute between the principal ophthalmologists of the Health Centre led to the management of the Health Centre changing the locks at their office. This led to the ophthalmologists' leaving to form their own practice. The management team at the original clinic told Ms. Coutinho that she was temporarily laid off and would be given a new job in the future. After approximately 60 days, Ms. Coutinho began working for the ophthalmologists who left — and she sued Ocular Health Centre for constructive dismissal.

The court held that it was not necessary to determine whether or not COVID-19 affected the layoff. Instead, the court emphasized that the regulation did not impact an employee’s pursuit of any civil remedies against an employer. Thus, the court in Coutinho held that Ms. Coutinho’s claim could be asserted at common law.

On the other hand, the Ontario case of Taylor v. Hanley Hospitality Inc. took a much different read on a similar situation. In a similar set of facts, Ms. Taylor was temporarily laid off in March 2020,  after the enactment of the IDEL. Though she was recalled back to her job in August 2020 (and was still working there as of June 2021), Ms. Taylor still claimed that the temporary layoff was a constructive dismissal at common law.

Departing from the conclusion in Coutinho only weeks afterwards, the court in Taylor held that the IDEL displaces the common law doctrine, and that Ms. Taylor was not constructively dismissed as per the IDEL regulation. Inconsistent with Coutinho’s finding, the court cited rules of statutory interpretation which say that “it offends the rules of statutory interpretation to give an interpretation that renders legislation meaningless”. Additionally, Taylor’s court identified that statutes enacted by the legislature displace the common law. Applying that to the case at hand, the court found that Coutinho’s decision did not consider and analyze those factors and in turn, held that the decision in Coutinho was wrongly decided.  

Many provinces have made amendments to their legislation regarding temporary layoffs in the face of COVID-19. The consequences of these particular decisions could be wide-reaching for employers in provinces with similar legislation or in those provinces that are silent on the topic. As it stands, the court has now held contradictory decisions on whether a COVID-19 temporary layoff under statute similar to the IDEL is constructive dismissal or not. As such, more clarity is needed and the law may continue to evolve here in either a similar situation or on appeal of the cases summarized here.

Workplace Safety

Given the obvious health implications of contracting COVID-19, the courts have taken an approach to evaluating the safety of a workplace that leans in a cautious direction while preserving the status quo ante.

A recent case from Québec is one example. In Laine v. Les recettes Cook It. inc., a decision from the Commission des norms, de l’équité, de la santé et de la sécurité du travail (the Québec workplace health and safety authority), an employee refused to work in an environment he claimed to be unsafe, as workers did not follow distancing guidelines and protective wear was not provided. The employer responded by demonstrating that PPE was available and that screening measures and other protocols were in place. The employer was willing to submit to an inspection. The employer prevailed, with the lesson being that fear of the pandemic on the part of an employee is insufficient to avoid work in its own right.

Workplace safety is a two-way street. Time and again, courts have held that employees who are disciplined — up to and including termination — for significant breaches of workplace COVID-19 policies have little recourse, whether in a unionized environment or not.

In Garda Security Screening Inc. v. IAM, District 140 (Shoker Grievance), an employee was fired due to a breach of the COVID-19 policy in her workplace. Previously, the employee had signed the workplace Code of Ethics and over the early course of the pandemic, had heeded numerous communications from her employer regarding requirements to isolate if awaiting COVID-19 test results, among other safety requirements. 

A quote from the decision below helps provide context for what spurred this employee’s termination:

"On April 12, 2020, the employer was informed by the grievor that she had tested positive for Covid -19. The employer then undertook to identify other employees and parties who had been in close proximity to the grievor. The grievor was placed on a leave of absence and returned to work on April 23, 2020. The grievor was asked to write a statement with respect to her actions. The grievor wrote that she was tested on April 6, 2020, that she did not work on April 6, 7, or 8, while waiting for her results, and that she was informed that she was positive on April 12, 2020. She wrote that no one told her, and she was not aware, that she was required to self-isolate."

Despite this employee’s assertions, an investigation revealed that she did in fact work on one of those dates. She was also shown to have known about the requirements to self-isolate, given the public communications on the topic. The arbitration board commented on the general atmosphere regarding COVID-19, especially in the pandemic’s early days, demanded the highest degree of personal responsibility. The board found that the employee showed no remorse or understanding of the potential for harm of their wrongdoing and as such, the termination was upheld. 

Employers who competently and consistently communicate about the conduct expected —especially with respect to health and safety during the pandemic — are likely in the clear for firing employees who significantly breach these standards to endanger others. Tribunals across the country are consistent in their stringency.

The arbitration panel at the Labour Board in B.C. upheld a similar decision where an employee’s “practical joke” about COVID-19 and coughing on a co-worker led to an employee suspension. The egregious conduct of the employee was examined, as were the communications regarding the need for individual safety measures to be taken during the course of the pandemic, and they pointed to the conclusion that significant discipline was justified.

As employees return to the workplace, we expect to see more decisions as the courts respond to novel situations.

We are available.

Fillmore Riley’s employment law practice continues to be available to assist Manitoba employers with their response to the COVID-19 pandemic. Our key contacts are:

David Simpson

Curran McNicol

Mark Newman

Celia Fergusson

Jenna Seavers

Kelsey Yakimoski

Resource posted August 9, 2021, with reports from Michael Badejo.