Waksdale Prevails: Ontario Court of Appeal Overturns Enforceability of Illegal Termination Provisions in Rahman In Rahman v Cannon Design Architecture Inc, 2022 ONCA 451, the Ontario Court of Appeal recently overturned a lower court decision which upheld an otherwise illegal termination provision because the employee sought legal advice prior to signing her employment contract. A divergent approach to the one taken in Waksdale v Swegon North America Inc, 2020 ONCA 391. The Waksdale Decision On June 17, 2020, the Ontario Court of Appeal in Waksdale ruled that a contract’s termination provisions must be read as a whole, to the effect that if any aspect of the termination clause is found to contravene the Employment Standards Act, 2000 (“ESA”), the entire clause will be rendered null and void for all purposes, despite the existence of a severability clause. The Case of Rahman Facts Farah Rahman was employed by Cannon Design Architecture Inc. (“CDAI”) as a Senior Architect, Principal and Office Practice Leader for over four years. She was given four weeks of base salary when her employment was terminated, without notice or cause. Prior to the commencement of her employment, Rahman sought independent legal advice and negotiated the terms of her employment agreement, including the termination provisions. With the help of legal counsel, Rahman negotiated “material improvements” to the terms of her severance package under her contract. Rahman signed two employment contracts with distinct termination provisions. The first was an “Offer Letter” asking Ms. Rahman to join CannonDesign, a subsidiary company wholly owned by CDAI, as a “Principal”. The second was an “Officer Agreement” between The Cannon Corporation (a corporate entity separate from CannonDesign and CDAI) and Ms. Rahman, to become Cannon Corporation’s Senior Vice President and Principal Officer. The Offer Letter referred to the Officer Agreement, stating that the latter also formed the basis of her employment. It provided that in the event of a conflict between it and the Officer Agreement, the Offer Letter would govern. After her dismissal, Rahman brought an action for wrongful dismissal. She argued that, in accordance with the decision in Waksdale, the termination provisions of the employment agreement were not enforceable because the “just cause” provision would allow for termination without notice in situations in which the ESA still required notice to terminate an employment contract. The termination provision: “CannonDesign maintains the right to terminate your employment at any time and without notice or payment in lieu thereof if you engage in conduct that constitutes just cause for summary dismissal.” Rahman argued that according to Ontario Regulation 288/01, an employee can be terminated without notice only where they have been “guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”— a standard Rahman argued was higher than “just cause” at common law. In addition, Rahman argued that the provisions of the initial “Officer’s Agreement” that had been sent to her before the employment agreement violated the ESA. The Officer’s Agreement and the employment agreement contained different termination provisions, and Rahman had not negotiated the Officer’s Agreement’s provisions. Ontario Superior Court of Justice The motion judge found that the contractual provision in the employment agreement which denied entitlements upon termination for just cause did not amount to an attempt to contract out of the Employment Standards Act, 2000 because the employer and employee had equal bargaining power in negotiating the employment agreement. The basis for the motion judge’s decision was that he found Rahman to be “reasonably sophisticated” as she received independent legal advice prior to entering into the contract. The Court found the termination provision to be valid and enforceable. The Court of Appeal On Appeal, the question before the Court was whether the motion judge erred in concluding that the termination provisions of the employment contracts govern the termination of her employment. Justice Gilese reasoned: [24] In my view, the motion judge erred in law when he allowed considerations of Ms. Rahman’s sophistication and access to independent legal advice, coupled with the parties’ subjective intention to not contravene the ESA, to override the plain language in the termination provisions in the Employment Contracts. By allowing subjective considerations to distort and override the wording of those provisions, the motion judge committed an extricable error of law reviewable on a correctness standard: Amberber v. IBM Canada Ltd., 2018 ONCA 571, 424 D.L.R. (4th) 169, at para. 65. It is the wording of a termination provision which determines whether it contravenes the ESA – even compliance with ESA obligations on termination does not have the effect of saving a termination provision that violates the ESA: Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158, 134 O.R. (3d) 481, at paras. 43-44. [28] The wilful misconduct standard requires evidence that the employee was “being bad on purpose”: Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310, at para. 79, citing Plester v. Polyone Canada Inc., 2011 ONSC 6068, 2012 C.L.L.C. 210-022, aff’d 2013 ONCA 47, 2013 C.L.L.C. 210-015. For example, in Oosterbosch v. FAG Aerospace Inc., 2011 ONSC 1538, 2011 C.L.L.C. 210-019, the court awarded damages for ESA notice and severance after holding that the employer had just cause to terminate the employee for persistent carelessness that did not meet the wilful misconduct standard. [29] There is nothing in the Operative Just Cause Provision that limits its scope to just cause terminations for wilful misconduct. In its plain wording, the Operative Just Cause Provision gives CannonDesign the right to terminate Ms. Rahman’s employment without notice or payment, for conduct that constitutes just cause alone. That means the Operative Just Clause Provision contravenes the ESA and s. 5 renders it void. Section 5 provides that no employer shall contract out of an employment standard and any such contracting out is void. The Court of Appeal found that the plain wording of the termination provision ran afoul of the ESA and was therefore void and unenforceable. The Court of Appeal ruled that the motion judge erred at law in considering the former employee’s “sophistication and access to independent legal advice” and used those factors, among others, to “override the plain language” in the termination provisions. Key Takeaways When the Rahman decision was released last year, it was found to be a major win in favour of employers. By reversing the decision, the Court of Appeal has upheld the Waksdale decision. It reinforces that termination provisions should be read together, in their plain wording, when assessing their validity and enforceability. The ever-changing legal landscape of employment law in Ontario should encourage employers to have their employment contracts regularly reviewed by a lawyer to ensure they are compliant with statutory requirements for enforceability purposes and to avoid expensive litigation. To incentivize employees to sign the new agreements with updated termination provisions, employers may provide consideration to employees in the form of a signing bonus, salary increase, or other incentives. If you have any questions regarding termination provisions and updating employment contracts, please contact Timothy Gindi at (416) 446-3340 or Timothy.Gindi@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Owais Hashmi* Sources [1] Rahman v Cannon Design Architecture Inc, 2022 ONCA 451 [2] Waksdale v Swegon North America Inc, 2020 ONCA 391. By Justin DominicBlog, Employment Law, Labour LawJuly 19, 2022August 15, 2022
Can An Employer Still Enforce a Mandatory Masking Policy? Ontario’s public health laws in response to COVID-19 continue to evolve. DSF has previously discussed the enforceability of mandatory vaccination policies in the workplace. This blog addresses the enforceability of mandatory masking policies introduced by employers now that Ontario law no longer requires masking in most settings. Evolution of the Ontario Mask Mandate On June 11, 2022, the Ontario mandatory masking requirement was lifted in public transit[1] and most health care settings. The province’s masking mandate has been gradually adjusted since the onset of the COVID-19 pandemic, becoming more relaxed as the volume of infections in Ontario has decreased. The significant changes to the mandate enacted on June 11 were perceived by many as the end of the mask mandate. However, individuals are still required to wear a mask in certain circumstances, such as in long-term care and retirement homes. Hospitals, while no longer obligated by the province to require masking, may nonetheless elect to require masks to be worn in their facilities. Indeed, many hospitals, such as Toronto’s University Health Network, have continued to require masking. Masking Policies in the Workplace Similar to hospitals, although not mandatory, private businesses may choose to have a masking policy in effect. Under the Occupational Health and Safety Act (“OHSA”), employers are required to take every precaution reasonable in the circumstances for the protection of a worker. This includes protection from “occupational illnesses”, such as COVID-19. To ensure compliance with the OHSA, it continues to be prudent for employers to have a masking policy. One possibility would be to require employees to wear a mask when walking through the common areas of the workplace but be permitted to remove their masks when working alone in their office. Individuals who wish to continue masking are permitted to do so, even if their employer does not require it. Employees who refuse to comply with their employer’s masking policy may be subjected to discipline. Is Refusal to Abide by an Employer’s Masking Policy Just Cause for Termination? Employers may terminate an employee at any time without cause, as long as they provide the terminated employee with all payments and entitlements in accordance with the Employment Standards Act, 2000, their employment contract and the common law. If an employee can show that they cannot wear a mask for medical or religious reasons, they would be entitled to accommodation under the Ontario Human Rights Code or the Accessibility for Ontarians with Disabilities Act. In these instances, employers would have a duty to accommodate the employee up to the point of undue hardship, with regard to cost and health and safety issues. However, to date, qualifying for such as accommodation has proved to be extremely difficult and this is likely to continue to be the case. In Beaudin v Zale Canada Co. o/a Peoples Jewellers, 2021 AHRC 155, the Human Rights Tribunal of Alberta (“HRTA”) determined that a store’s choice to refuse service to a customer who refused to comply with its masking policy, even though at the time there was no public health requirement to wear a mask, did not amount to discrimination. In this instance, it was not disputed that the patron had a disability which prevented him from wearing a mask, but because the store offered alternatives such as shopping online (with free delivery) and curbside pick-up, and since the employer had good faith and legitimate health and safety reasons for introducing the policy, the HRTA dismissed the complaint. There are other cases in which human rights tribunals have decided against individuals who refused to follow the mask policies of private businesses.[2] In each of these cases, the tribunals concluded that the complainant was not entitled to an exemption from wearing a mask under the applicable human rights legislation. Employers may consider providing alternatives, such as permitting employees to work remotely to avoid human rights complaints about the enforcement of a masking policy. However, as the British Columbia Human Rights Tribunal concluded in The Customer v The Store, 2021 BCHRT 39, “[t]he Code does not protect people who refuse to wear a mask as a matter of personal preference”.[3] The above cases suggest that an employer will likely have a strong case if they choose to terminate an employee for cause and wilful misconduct for failure to comply with a masking policy. However, if COVID-19 becomes less of a public health and workplace safety concern and case counts decrease, it will become more difficult for an employer to establish just cause and wilful misconduct when terminating an employee for failure to comply with a masking policy. On the other hand, if a new variant and wave of the virus emerge and case counts increase, the employer’s case for cause and wilful misconduct, if an employee does not comply with its masking policy, will become strong again. Ultimately, masking disputes in the workplace will depend on the facts and circumstances of each case and whether the masking policy is reasonable in the circumstances. If you have any questions about mask mandates in the workplace or employment law generally, please contact Marty Rabinovitch at (416)-446-5826 or Marty.Rabinovitch@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Chloe Carr* [1] With the exception of the TTC’s “Wheel-Trans” Service. [2] See also: Szeles v Costco Wholesale Canada Ltd., 2021 AHRC 154; Rael v Cartwright Jewelers and another, 2021 BCHRT 106; Coelho v Lululemon Athletica Canada Inc., 2021 BCHRT 156; Ratchford v Creatures Pet Store, 2021 BCHRT 157. [3] The Customer v The Store, 2021 BCHRT 39 at para 14. By Justin DominicBlog, COVID-19, Employment LawJuly 1, 2022August 15, 2022
Court of Appeal Declines to Decide whether IDEL Constitutes Common Law Constructive Dismissal Following the introduction of Infectious Disease Emergency Leave (“IDEL”) in Regulation 228/20 (the “Regulation”) passed May 29, 2020, pursuant to the Employment Standards Act, 2000 (“ESA”), the common law of constructive dismissal has been uncertain as a result of conflicting Ontario court decisions. Background The Regulation states that non-unionized employees who had their hours reduced or eliminated due to COVID-19 are deemed retroactively to be on IDEL. As reflected in section 50.1 of the ESA, a temporary reduction or elimination of an employee’s work hours and/or wages due to COVID-19 does not constitute constructive dismissal during the “COVID-19 period”, which began (retroactively) on March 3, 2020, and is currently set to expire on July 30, 2022. The Regulation has resulted in some confusion, since it prevents employees on IDEL from advancing a claim for constructive dismissal under the ESA, contrary to the well-established principle that an employer does not have an inherent common law right to temporarily lay off an employee – even if the employer complied with the layoff provisions of the ESA (the employer would need to include a lay-off provision in the employment contract). Normally, in order for the common law to be altered by statute, there would need to be express language in the statute to that effect. As stated expressly at section 8(1) of the ESA, “no civil remedy of an employee against his or her employer is affected by this Act”. The Regulation does not contain any language which would modify this section of the ESA, leaving many to wonder how the courts would interpret and apply the Regulation. In earlier blog posts, which can be found here and here, we too at DSF contemplated this uncertainty. Coutinho v Ocular Health Centre Ltd., 2021 ONSC 3076 (CanLII) (“Coutinho”) The question of whether the Regulation prevented an employee from advancing a claim for constructive dismissal at common law was first put before the court in Coutinho. The court ruled that while the Regulation prevented the employee from pursuing damages under the ESA, it did not prevent them from pursuing a claim for constructive dismissal at common law. Thus the court determined that the Regulation did not impact an employee’s common law right to assert that a reduction in hours of work and/or wages constitutes a constructive dismissal, which would entitle the employee to wrongful dismissal damages. For a more thorough discussion of this decision, please see our previous blog post here. Taylor v Hanley Hospitality Inc., 2021 ONSC 3135 (“Taylor”) The “certainty” provided by the court in Coutinho did not last long, however, following the conflicting decision of the Ontario Superior Court in Taylor. In contrast to the decision in Coutinho, the Court determined that an employee on IDEL under the Regulation had no right to claim constructive dismissal claim at common law. Please see our previous blog post here for more details on this decision, and our blog post here to see our first analysis of the conflicting judgments. Taylor v Hanley Hospitality Inc., 2022 ONCA 376 As anticipated, the Superior Court’s decision was appealed due to the inconsistencies between the rulings in Coutinho and Taylor. The Court of Appeal decision was expected to clarify the law in this regard, however, the decision released on May 12, 2022, ultimately did not do so. The Court of Appeal overturned the trial judge’s decision on other, unrelated grounds related to an erroneous granting of a Rule 21 motion under the Rules of Civil Procedure. Thus no determination was made on whether section 50.1 of the ESA overrides an employee’s common law right to assert constructive dismissal. The case and this question of law were sent back to the Superior Court to be re-adjudicated. Current State of the Law: Employers Beware For the time being, Coutinho and Fogelman v IFG, 2021 ONSC 4042 are the governing authorities. In both decisions, the Superior Court has found that section 50.1 and the Regulation do not displace an employee’s common law right to assert constructive dismissal. Although the law is by no means certain, employers should be aware that according to these decisions, many temporary layoffs due to COVID-19 could be considered unlawful and may entitle employees to wrongful dismissal damages. Our employment law team at Devry Smith Frank LLP will continue to monitor the state of the law closely. If you have any questions regarding the IDEL, or any other labour or employment law issues, we would be happy to assist you. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Chloe Carr* By Justin DominicBlog, COVID-19, Employment LawJune 14, 2022August 15, 2022
Can Employers Monitor Their Employees’ Electronic Activity? Bill 88, the Working for Workers Act, represents one of many attempts by the Ontario legislature to respond to the unique challenges arising during the COVID-19 work-from-home era. One element of this bill will amend the Employment Standards Act, 2000 (“ESA“) to account for the use of electronic monitoring software by employers. As of October 11, 2022, employers with 25 or more employees are required to have a written policy which addresses the electronic monitoring of employees. Background Bill 88, a supplement to the 2021 version of the same name (which you can read more about here) received Royal Assent on April 11, 2022. Electronic monitoring software, though not exclusively used by employers of remote workers, is typically used to surveil the attendance and productivity of those working from home. It is this remote relationship that the new ESA provisions intend to regulate, although in-person employees will still be entitled to notice if such software is being used to monitor them. What are the implications for employers? Employers are not prohibited from utilizing monitoring software. They must, however, have a policy which addresses the following: Whether the employer electronically monitors employees and if so, a description of how and in what circumstances the employer may electronically monitor employees, and the purposes for which information obtained through electronic monitoring may be used by the employer. The date the policy was prepared and the date any changes were made to the policy. Such other information as may be prescribed. A copy of the policy must be provided to employees before October 11, 2022, and when changes are made to the policy, updated copies which reflect those revisions must be provided within 30 days of the date on which the changes were made. When a new employee is hired, they must be provided with a copy of the policy within 30 days of their start date. If using the services of a temporary help agency, those employees must be provided a copy within 24 hours of the start of their assignment, or within 30 days from the day, the employer is required to have the policy in place, whichever is later. What are the implications for employees? While there is a presumption that employees have a reasonable expectation of privacy, this presumption can be displaced through the employer’s electronic monitoring or other policy. There is no recourse under the Working for Workers Act if an employee finds the content of the policy or scope of monitoring to be unreasonable, although certain common law remedies may be available depending on the facts and circumstances. Employees may complain, however, if they are not provided with a copy of the employer’s electronic monitoring policy in accordance with the applicable time frames. What should be included in a monitoring policy? The legislative requirements center around transparency when using electronic monitoring rather than limiting the use of this technology. Thus, employers are simply required to state whether or not they will be using such technology and if so, they must explain in what circumstances they intend to do so. The policy must also include the date it was prepared and the date of any changes made to the policy. While the current requirements are minimal, the legislation requires that the policy include “such other information as may be prescribed,” hinting at the potential expansion of the legal requirements for electronic monitoring policies.[1] Employers should consider the following when drafting their policy: Is the use of monitoring software reasonable and necessary? (Is there a specific need for it? Will it fulfill this purpose and if so, how?) What is the scope of the software? (Does it monitor all activity, or simply record when people sign on to their computer, and sign out when they are finished working?) How will the information collected be used? (For example, will it be used to determine employee productivity? To confirm attendance? To keep records of how long an employee is away form their computer during the day?) How can the employer ensure all employees are made aware of the existence of the policy and its content? (The policy could be made available online and employees notified of the date on which becomes effective. The employer could require the employee to acknowledge in writing that they have read and understood the content of the policy). If you have any questions regarding the use of electronic monitoring software in the workplace, how to draft such monitoring policies or any other obligations and rights enshrined by these legislative changes please contact Marty Rabinovitch at (416) 446-5826 or Marty.Rabinovitch@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Chloe Carr* [1] [1] Bill 88, An Act to enact the Digital Platform Workers’ Rights Act, 2nd Sess, 43nd Leg, Ontario, 2022 (assented to 11 April 2022), ON 2022, c 41.1.1(2)3. By Justin DominicBlog, COVID-19, Employment LawJune 14, 2022June 24, 2022
Employees Injured While Working from Home Could be Entitled to Workers’ Compensation Seven months into the COVID-19 pandemic, Alexandria Gentile-Patti was working from home as a telephone customer service agent for Air Canada. At the time, many Canadians brought their workplaces home to weather the pandemic. On September 25, 2020, Mme Gentile-Patti took her lunch break and ventured downstairs. After a few steps, she lost her footing and fell—sustaining an injury. For this harm, she claimed workers’ compensation. Air Canada contended that the fall had no connection to her employment; i.e., she was at home and she was not working when she fell. Ultimately, the Québec Administrative Labour Tribunal (“Tribunal Administratif Du Travail”) ruled that Mme Gentile-Patti was indeed entitled to compensation under the provincial framework for employment injuries. To be clear, the injury at home was a workplace accident for compensation purposes. It occurred only moments after she disconnected from work to take a break and eat. The COVID-19 pandemic has changed where and how thousands of Canadians work. According to Statistics Canada, nearly a third of employees aged fifteen to sixty-four performed most of their work out of their homes from 2020 to 2021.[1] This figure is more than seven times higher than it was in 2016.[2] This tribunal decision out of Québec signals that the law concerning working in virtual workplaces is still developing. The decision also shows that employees need to be protected from harm wherever and however they work. Even as measures to combat the spread of COVID-19 are rolled back, many changes to the employment landscape may be here to stay. The law will need to continue to evolve in response to these developments. Background A workplace insurance system provides benefits to employees who have been injured at work or who have workplace illnesses. A workplace insurance system is also called workers’ compensation. In Québec, the Act respecting industrial accidents and occupational diseases provides the framework under which compensation is provided for employment injuries.[3] The compensation aims to provide “physical, social and vocational rehabilitation” for an injured worker.[4] Other provinces have similar schemes. In Ontario, the Workplace Safety and Insurance Act, 1997 outlines the statutory requirements for employees to qualify for workplace insurance benefits.[5] In Ontario, an accident at work includes, “a chance event occasioned by a physical or natural cause … arising out of and in the course of his or her employment.”[6] In Québec, an accident at work consists of an “unforeseen and sudden event” which arises “out of or in the course of work.”[7] The Québec Case of Air Canada et Gentile-Patti Mme Gentile-Patti fell down her stairs in her private residence in the middle of her workday. She disconnected from her workstation to take a lunch break—ensuring that there would be no further incoming customer calls.[8] She left her dedicated work area on the second floor to go to a separate space to eat. Her employer, Air Canada, asserted that Mme Gentile-Patti was not working when she fell. Quite literally, she disconnected from work immediately prior to the accident. Further, Air Canada had no control whatsoever over Mme Gentile-Patti’s home environment. The accident occurred during her private life (or in her “personal sphere”) which was not connected to her work.[9] In sum, Air Canada contended that Mme Gentile-Patti’s injury was not the result of a workplace accident and that she should not be entitled to workers’ compensation. Criteria to determine whether a work accident occurs during the performance of work have been developed by Québec jurisprudence. These factors include location, time, remuneration for the activity, degree of authority exercised by the employer over the employee, purpose of the activity, whether the activity was incidental, and connection of activity to the performance of work.[10] The Tribunal noted that these criteria are to be considered together, with a particular focus on the connection of the purpose of the activity to the performance of the work.[11] The Tribunal noted that there was no distinction drawn by the statute when an accident occurs in the employer’s establishment, in the employee’s private residence, or elsewhere.[12] For example, workplace accidents have occurred in a hotel room, convention halls, and parking lots.[13] There was nothing to suggest that a personal residence should be specifically excluded from this analysis. In Mme Gentile-Patti’s case, the very reason why she was at home at that time was because it was required by her employer.[14] Even though Mme Gentile-Patti was on break in her home, it was integral to the way she worked. The schedule—which contemplated taking breaks—was a key feature of how the work was organized. The Tribunal noted that a high degree of precision about the specific activity at the very moment the accident occurred (i.e., going to eat), was not necessarily determinative.[15] The Tribunal concluded that Mme Gentile-Patti’s fall down the stairs—of her private residence while going to perform a personal activity, while on break from working—was nonetheless a workplace accident for compensation purposes. Discussion and Conclusion As employees invite more of their work lives into their homes—out of either necessity or convenience—the distinction between work and personal spheres becomes less clear. In light of the rapid changes to the Canadian employment landscape in the face of COVID-19, the law is evolving to adapt to these new realities. Accidents which may have an initial appearance of being purely of personal character may qualify as workplace accidents. However, it remains to be seen how this Québec tribunal decision will influence or be received in Ontario. Employers in Ontario have a statutory duty to safeguard the health and safety of their employees pursuant to the Occupational Health and Safety Act.[16] By law, an employer must take every reasonable precaution to maintain a safe working environment.[17] But it remains to be seen what steps employers could reasonably take to protect employees in their own homes. This uncertainty is all the more pronounced when the theoretical limits of what constitutes a home workplace are not well-defined. Mme Gentile-Patti was injured near where she was working, while she was not working. The fact that the Tribunal found a sufficient nexus between the accident and her work suggests that the Tribunal contemplates a very large sphere where work-“adjacent” activities could be considered work activities. For more flexible work arrangements, even more of employees’ time—and even more of the places they go—could be considered part of their work sphere. In an era where a third of Canadian employees are performing most of their work at home, and where more and more activities could be considered performed “in the course of employment,” the law will need to respond by clearly articulating certain limits. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” [1] Statistics Canada, Working from home during the COVID-19 pandemic, April 2020 to June 2021 (Ottawa: Statistics Canada, 4 August 2021). [2] Ibid. [3] Act respecting industrial accidents and occupational diseases, CQLR c A-3.001, s 1. [4] Ibid. [5] Workplace Safety and Insurance Act, 1997, SO 1997, c 16, Schedule A. [6] Ibid, ss 2(1), 13(1). [7] Gentile-Patti, supra note 1 at para 10 (“Un accident du travail est constitué d’un événement imprévu et soudain qui survient par le fait ou à l’occasion du travail”). [8] Ibid at para 7. [9] Ibid at paras 9-10. [10] Plomberie & Chauffage Plombec inc et Deslongchamps, CALP 51232-64-9305, 17 January 1995, B Lemay, cited by Gentile-Patti, supra note 1 at para 11. [11] Tremblay et Société des Alcools du Québec, CLP 287024-62B-0604, 21 February 2007, N Blanchard, at para 27 cited by Gentile-Patti, supra note 1 at para 12. [12] Gentile-Patti, supra note 1 at paras 11, 14. [13] Ibid at para 16. [14] Ibid at para 18. [15] Savard et Centres jeunesse Montérégie, 2021 QCTAT 2659 (CanLII) at para 21, cited by Gentile-Patti, supra note 1 at para 19. [16] RSO 1990, c O.1. [17] Ibid, s 25(2)(h). By Justin DominicBlog, Employment LawMay 4, 2022
Vicarious Liability and Employer’s Responsibility The Court of Appeal recently upheld the decision made in the case of Dagenais v. Pellerin, 2022 ONCA 76 which calls into question the scope of vicarious liability of an employer. This article will discuss how the court came to its reasoning, as well as outline the test for finding vicarious liability and the relevant case law referenced to reach this decision. Vicarious liability involves placing the liability for one’s actions or inaction upon another person due to the nature of their relationship. This can include a parent and child, an employer and employee, an owner of a vehicle and the driver. At Common Law, an employer can be vicariously liable for the wrongful acts by an employee in the course and scope of their employment. In Canada, this is a form of strict liability. While vicarious liability does not look to evaluate the culpability of an employer, it executes accountability based on a factual situation, once one has been established. Case Law Upheld The recent decision in Dagenais v. Pellerin, 2022 ONCA 76, was upheld by the Court of Appeal. The motion judge found that the employer failed to demonstrate that they were not vicariously liable for the motor vehicle accident. The employee had been instructed by his supervisor to travel to a job site two hours away. While travelling, the employee stopped for a coffee along the way. As the employee returned to his vehicle and continued his journey, he struck another vehicle. The stop taken by the employee was found to have no basis or interference, thus meeting the standard for the first part of the Salmond Test, which is the test to determine vicarious liability. The Test for Vicarious Liability The test for vicarious liability is known as the Salmond Test which was affirmed by the Supreme Court of Canada Bazley v. Curry [1999] 2 S.C.R 534. The Salmond Test posits that employers are vicariously liable for: Employee acts authorized by the employer; Unauthorized acts so connected with the authorized acts that they may be regarded as modes of doing an authorized act, as shown in Canadian Pacific Railway Co. v. Lockhart, [1942] A.C. 591 at 599 (P.C.) Claimants must show that they have a valid cause of action against an employee for a fault they committed within the scope of their employment. This is linked to the idea that enterprises should be responsible for the risks they introduce into society, according to Justice McLachlin. Off-Duty Conduct The scope of vicarious liability could range in inclusion; in particular, off-duty conduct as seen in the case of Cimpean v. Payton [2008] O.J. No. 2665. The Ontario Superior Court has stated that “acting in the course of employment” is dependent upon each set of facts. After reviewing the employee contracts, it was found that the employment relationship extended to include responsibility for the behaviours outside of the workplace. Thus, impugned conduct can potentially be tied to the employee/employer relationship and thus holding the employer vicariously liable. Specifically, if the conduct advanced the employer’s interests, if the employee was in the process of performing an authorized act or if the employment relationship was not too isolated from the conduct. Conclusion Employers should be mindful of any acts of their employees that could potentially lead to reputation risk and financial consequences. Employers may be shocked to learn that despite the fact that they are not at fault for their employee’s accident, an employer may still be held liable, vicariously, for their employee’s actions or inactions. Where this will have a severe impact on an employer is if the employee is at fault, and the insurance coverage of the vehicle is not enough to cover a potential plaintiff’s damages. The employer, much like an at-fault party may be held personally liable for any amounts awarded which exceed the insurer’s policy limits. Through the case law mentioned, the courts have found that a finding of “acting in the course of employment” is dependent on specific facts relating to each case. However, reviewing employee contracts along with the status of their insurance coverage, with an experienced insurance and employment lawyer could assist in minimizing future risk. If you have any questions regarding vicarious liability and your employment contract and any potential impact on your workplace, please contact Timothy Gindi at (416) 446-33340 or Timothy.Gindi@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Angela Victoria Papeo* By Justin DominicBlog, Employment LawMarch 31, 2022
High Threshold for an Employer to Establish Job Abandonment (Hettrick v. Triple F Paving Co. Ltd., 2021 ONSC 208) Facts: A 73-year old employee, who worked for the employer since 1996 and who performed the roles of receptionist, bookkeeper and office administrator, went on a medical leave of absence on September 29, 2015. The employer requested a medical certificate at this time. The employee did obtain a medical note from her physician dated November 27, 2015, which indicated that she was not well enough to return to work and that her return to work date was “indefinite”, but did not provide the letter to her employer due to her mental health state at the time. On September 15, 2017, and September 25, 2017, the employee wrote the employer to advise that she could return to work on a graduated basis and with modified duties. The employer did not respond until November 6, 2017. The employer’s correspondence took the position that because the employee did not provide a medical note in 2015 in response to the employer’s request, she had abandoned her position. Decision: The court concluded that the employee had not abandoned her position and was therefore entitled to a severance package of eighteen (18) months. Significantly, the court determined that the employer never specifically advised the employee that a medical certificate would be required in order for the medical leave to be approved. The employee asked the employer whether any additional information would be needed to process her request for medical leave, but the employer did not answer the question. The court further concluded that at the time of the leave, the employee communicated to the employer that it was her intention to return to work when she was medically fit to do so. In arriving at its decision, the court applied the objective test for job abandonment, as set out in Betts v. IBM Canada Ltd. in paragraph 57: “[D]o the statements or actions of the employee, viewed objectively by a reasonable person, clearly and unequivocally indicate an intention to no longer be bound by the employment contract[?]” Takeaway: This decision establishes a high threshold for an employer to prove that an employee has abandoned their job. The employer must make it clear to the employee that failure to comply with a reasonable request (such as providing a medical note) will result in the employer considering the employee to have abandoned their job. Even then, there is no guarantee that the employer will succeed in establishing job abandonment, in particular situations where an employee is on medical leave but has failed to provide proper medical documentation (or any medical documentation at all). Employers can also follow up with employees on medical leave on a regular basis to obtain updated medical documentation about the employee’s prognosis. If the medical evidence indicates that the employee will not be able to return to work and perform the basic duties of their job, with or without accommodations, within the reasonably foreseeable future, their employer can take the position that the employment contract has been frustrated, and if the employer is successful, the employee would receive only their minimum entitlements under the Employment Standards Act, 2000. In this scenario, they would not be entitled to a reasonable notice period at common law. If you have more questions related to employment law matters, please visit our website or contact Marty Rabinovitch at Devry Smith Frank LLP to discuss any questions regarding your rights and options. This blog was co-authored by Student-At-Law Amar Gill. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please contact a lawyer. Each case is unique and different and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” Sources [1] Hettrick v. Triple F Paving Co. Ltd., 2021 ONSC 208 By Justin DominicBlog, Employment LawMarch 28, 2022
Employees Must Disclose Vaccination Status where an Enforceable Vaccination Mandate Exists, but Employers are Cautioned to Protect Employee Privacy It is likely that employer policies with respect to COVID-19 will be enforceable only where reasonable in the full context of all the facts and circumstances. A policy for mandatory vaccination may be unreasonable where practical alternatives exist. Most importantly, what is reasonable under one set of circumstances may be unreasonable in another. But whether an employee is vaccinated or not, should they be compelled to disclose their status to an employer? Where disclosed, how jealously should the employer safeguard this information? Background Employers may create COVID-19 policies for employees with respect to testing, restrictions, vaccination, and disclosing vaccination status. Certain aspects of these policies may be enforceable—others may not be. These various aspects could fall under four categories: testing, restrictions, vaccination, and disclosure of vaccination policies. Courts have not (yet) provided any guidance to employers with respect to what kinds of these categories of policies will be enforceable. However, labour arbitration decisions may yield insight as to what kinds of policies will be enforced by the courts. For a more fulsome explanation, see our related blog with respect to the Reasonableness and Enforceability of Mandatory COVID-19 Vaccination Policies in the Workplace. Disclosing Vaccination Status is a “Minimal Intrusion” into the Privacy of Employees In the labour arbitration decision of Electrical Safety Authority (ESA) v Power Workers’ Union, it was decided that requiring an employee to disclose medical information, such as vaccination status, “must be reasonably necessary and involve a proportionate response to a real and demonstrated risk or business need.”[1] But, in Bunge Hamilton Canada v UFCW Local 175, it was held that disclosure of vaccination status would be a minimal intrusion into the employee’s right to privacy, being considerably outweighed by “enormous public health and safety interests.”[2] In one decision, challenging a policy to disclose vaccination status was determined to be effectively a challenge to the vaccination policy itself. In Teamsters Local Union 847 v Maple Leaf Sports and Entertainment (MLSE), an employee was placed on unpaid leave for failing to disclose his vaccination status.[3] The union did not dispute the mandatory vaccination policy but contended that an employee’s vaccination status is private and should not be subject to disclosure. Ultimately, the arbitrator ruled that: “I do not see how the Employer can enforce a vaccine mandate without requiring disclosure of an employee’s vaccine status.”[4] Therefore, when a policy for vaccination is reasonable and enforceable, it is likely that a policy to disclose vaccination status will also be enforceable. Employers Should be Vigilant in Safeguarding Employee’s Personal Medical Information, such as Vaccination Status When vaccination status is disclosed, the privacy concerns of employees must be addressed. Employers are strongly recommended to keep the information confidential, safe, and secure. The privacy rights of employees are not well articulated under any statutory framework. The Occupational Health and Safety Act contemplates protecting employees in general—but it is silent with respect to protecting employees’ privacy interests.[5] Similarly, the Ontario Personal Health Information Protection Act, 2004 does not specifically articulate protections in an employment context.[6] Federal legislation may offer some protection through the Personal Information Protection and Electronic Documents Act and the Privacy Act, but again, neither offer concrete protections for employees in the workplace.[7] Informational privacy rights are recognized and protected under the common law. In Jones v Tsige, the Ontario Court of Appeal described that “intrusion upon seclusion” is a nominate tort and is available as a cause of action.[8] Under the holding in Jones, the intrusion must be either intentional or reckless.[9] Indeed, the labour arbitration decision of ESA, supra, referred to the Jones decision to justify its holding that employees’ privacy rights are significant.[10] There is, as yet, no Ontario jurisprudence that found an employer liable for damages in tort for breaching the privacy of its employees. However, employers would be cautioned to nonetheless tread carefully. Employers must constantly engage in a balancing exercise between the privacy of their employees and the needs of the business, and the official recognition of the tort of inclusion upon seclusion makes this exercise all the more challenging. A recent example reveals the potential risk for employers when managing COVID-19 policies. The Saskatchewan Health Authority (SHA) had a program for mandatory COVID-19 testing to accommodate unvaccinated employees. On February 11, 2022, the employer sent a mass email to participants of the program. However, employee names were “inadvertently added to the CC (carbon copy) field, instead of the BCC (blind carbon copy) field.”[11] Consequentially, participants of the program were identified to each other. SHA took the position that this error did not actually reveal the vaccination status of any employee, as it only identified participants of the program. At least one employee remarked that the implication was there nonetheless. Consequences for SHA—if any—are not yet known. Conclusion Labour arbitration decisions have held that in order to have an effective COVID-19 vaccination policy, employees need to disclose their vaccination status to their employers. An employee disclosing their vaccination status to their employer may well be only a “minimal intrusion,” but the same can not be said if an employer recklessly mishandles sensitive information. In light of the fact that breaching informational privacy rights may give rise to liability in tort under the common law, the potential risk to employers is clear. Employers would be well advised to shore up their privacy policies and practices in light of any mandatory COVID-19 vaccination policies and disclosure requirements. Employers are duty-bound to protect their employees, and this protection must necessarily take many forms. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please contact a lawyer. Each case is unique and different and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” References [1] Electrical Safety Authority v Power Workers’ Union (7 November 2021) arbitrator: John Stout at paras 37-38 [ESA]. [2] Bunge Hamilton Canada, Hamilton, Ontario v United Food and Commercial Workers Canada, Local 175 (13 December 2021) arbitrator: Robert J Herman at para 25. [3] Teamsters Local Union 847 v Maple Leaf Sports and Entertainment (12 January 2022) arbitrator: Norm Jesin [MLSE]. [4] Ibid at para 20. [5] RSO 1990, c O.1. [6] SO 2004, c 3, Sched A. [7] SC 2000, c 5; RSC, 1985, c P-21. [8] Jones v Tsige, 2012 ONCA 32 (CanLII) at para 66. [9] Ibid at para 71. [10] ESA, supra note 1, at para 63. [11] Yasmine Ghania, “Sask. Health Authority accidentally outs employees who were part of mandatory COVID testing program,” (16 February 2022) online: CBC News <cbc.ca> By Justin DominicBlog, Employment LawMarch 22, 2022April 5, 2022
Employee vs. Independent Contractor: What to Expect in a CRA Audit As a part of DSF’s ongoing Employment Law seminar series, I was asked to participate and provide a tax lawyer’s perspective as well as some anecdotal experience. For tax law purposes, the question of employee vs. independent contractor can be a very nuanced issue; provincial labour laws are not determinative as the Canada Revenue Agency (“CRA”) is tasked with applying the framework of federal legislation, such as the Income Tax Act[1], under which specific rules have been developed by the Tax Court of Canada, the Federal Court of Appeal and the Supreme Court of Canada. How is an “Employee” Defined under the Income Tax Act? It may come as some surprise for a piece of legislation as complex as the Income Tax Act (“ITA”), but the act itself contains no specific definition for “employee”. Subsection 248(1) simply reads employee includes officer; So while the definition in the ITA deems a corporate officer to be an employee, it goes no further in providing specific guidance. But where the statute remains silent, the common law has developed over time to fill in the gaps. The main distinction that can be drawn between an employee versus an independent contractor is often summarized as a contract of service vs. a contract for service. To determine the difference, each factor in the relationship ought to be examined. A dash of common sense is often in order, but the concept is defined almost completely by the common law in the taxation sphere. The Common Law Definition of “Employee” for Tax Purposes Although the common law is a creation of judges of Canada’s various Courts, for most taxpayers, the CRA is the ultimate decision-maker with respect to the determination of employee vs. independent contractor. That being said, the CRA must apply the law, and thus the decisions of the Courts when making such a determination. The first and perhaps most important case of note with respect to the contractor versus employee distinction is Wiebe Door v MNR.[2] In Wiebe Door, the Federal Court of Appeal was tasked with reviewing the Tax Court of Canada’s trial decision. The Tax Court judge had ruled that the contractors working for the appellant corporation must have been employees because of the “integral nature” of the workers to the employers’ business. The FCA overturned this decision on the basis that the Tax Court judge had made a mistake by placing too much emphasis on the “integration” test, and had failed to properly consider and weigh other relevant factors. But what are these “relevant factors”? In 671122 Ontario Ltd. v Sagaz Industries[3], Justice Major of the Supreme Court of Canada summarized the relevant factors that are generally to be considered: control – more control is generally exercised by an employer over an employee than by a client over a self-employed person. This control can be time of work, order of tasks, place of work and other similar factors; chance of profit versus risk of loss – self-employed persons usually take some degree of financial risk, and more opportunity for profit than employees; integration – as per the Tax court in Wiebe Door, an employee’s job will be an integral part of an employer’s business, whereas the tasks performed by a self-employed worker will likely be less integrated into the client’s day-to-day operations; and tools and equipment – self-employed contractors are more likely to supply their own tools and equipment, as well as being responsible for their maintenance. Justice Major also summarized the proper approach to reviewing the relationship holistically: “The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker’s activities will always be a factor. However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker’s opportunity for profit in the performance of his or her tasks.” The basics laid down in the above-referenced cases have been modified slightly over the years, though arguably not substantively. For example, in 1392644 Ontario Inc. v Canada[4], the Federal Court of Appeal introduced a “two-step” approach to the determination of employee vs. independent contractor for the purposes of the ITA. The two-step approach requires that the decision-maker first examine the parties’ written contract to determine if it creates an independent contractor relationship and if so to move on to considering the underlying “objective reality” of their actual behaviour. In the author’s opinion, this two-step approach makes a procedural, but arguably not a substantive change to the analysis – it has always been the case that all factors (including the written contract) are to be examined from an objective perspective, though forcing a decision-maker to refer first to the parties’ written contract may signal at least some form of deference to intention, though this was not helpful to the appellant in the instant case. It should also be noted that the traditional tax law adage of “form matters” could perhaps be utilized to some effect in “overriding” the finding of an employment relationship. For example in TBT Personnel Services Inc. v Canada[5] the CRA had determined that the appellant corporation’s truck drivers were employees and not independent service providers. Some of the impugned employees however had been operating through their own corporations. The Tax Court of Canada originally ruled that the incorporated drivers were not and could not be employees due to the use of the corporate form. On Appeal to the Federal Court of Appeal, the Crown conceded from the outset that the drivers who had provided services through their corporations could not be deemed to be employees in accordance with the lower court’s decision. Since the Crown conceded this fact from the outset, the FCA technically did not issue any ruling on this point, though in its reasons it appears to react favourably to the Crown’s admission. It seems likely on this basis that had the Court had a chance to rule substantively on this point that its conclusion would have been the same as that of the Tax Court, and that absent some form of sham the use of the corporate form will be determinative.[6] As an aside, those considering incorporation to avoid an employee/employer relationship should be wary of the “personal services business” rules in the ITA and plan accordingly with a professional advisor.[7] Why Does the CRA Care About Employee vs. Contractor? Canada’s system of income taxation is based upon the concept of self-reporting. A taxpayer earns income in the year, calculates their taxes payable by filing a return and pays their balance. While this works in a perfect world, the reality is that most people do not put taxes top of mind; in particular, getting a large bill at the end of the year that could be upwards of half of your earnings may put most in the position of not being able to pay the balance. Administering the taxation system, including collections is time-consuming and expensive, so the payroll system was designed as a first line of defense to protect Canada’s tax base. By placing the obligation to withhold and remit income tax, CPP and EI on employers, the vast majority of Canadians become automatically compliant with their obligations. This of course means that when a payroll amount is not remitted, the employer, not the employee is responsible for the shortfall. In an independent contractor situation, the employer simply makes gross payments to the contractor, and it is the worker’s job to prepare and file their return, as well as pay their taxes by the due date. Although the vast majority do just that, enforcing the obligations of those that don’t require major manpower. Thus it seems obvious that the CRA does have an administrative incentive to classify as many workers as possible as employees. What Can Trigger a CRA Audit? The CRA conducts payroll audits in the normal course of its operations just as it does for all taxes and programs it is tasked with administering. Payroll auditors are referred to as “Trust Examiners” and will often attend the business premises to conduct their payroll reviews. A normal payroll audit will encompass a review of the business’ income tax withholdings as well as amounts required to be withheld and remitted under the Canada Pension Plan[8] and the Employment Insurance Act[9]. While no two audits are identical, based on the author’s anecdotal experience there are a number of common reasons why a business may be selected for a payroll audit: The CRA may have an ongoing project focussing on a certain sector of the economy; There may be a tip provided from a disgruntled former worker or a provincial labour authority that alerts the CRA to investigate; Certain high-risk industries such as construction, spas or hair salons, are often selected for payroll and other types of tax audit, normally owing to those sectors’ large volume of cash transactions; An audit of a different tax account, such as GST/HST reveals discrepancies in payments to contractors or other third parties that will result in a referral to the payroll division; and The ever-present element of random selection or chance, combined with computer algorithms in the CRA’s internal system that analyze irregularities may trigger a closer look. In the course of a payroll audit, the Trust Examiner may come across ambiguities in the business’s relationship with any independent contractors, and possibly some indicia of an employment relationship and decide that further investigation is necessary. If so, the Trust Examiner will refer the issue to the CRA’s “Rulings Directorate” to further investigate the facts and make a final determination on the worker’s status. The Rulings Directorate is a specialized division of CRA that has the task of reviewing all of the evidence and circumstances and issuing an administratively binding opinion on the status of a particular worker as either employee or independent contractor. The Rulings Directorate does not conduct audits itself but acts in a supporting role for the Trust Examiner in these scenarios. The referral of a particular case to the Rulings Directorate is normally done at the behest of a payroll Trust Examiner in the course of an audit, but they will also review proactive requests; in some scenarios, the “employer”, the worker or both may request a ruling on their relationship proactively to avoid future payroll issues. Whether or not an unfavourable decision on such a request could trigger a further review or full payroll audit of the “employer” is not something the author has seen in practice, but could be a potential area of concern if one is considering such a proactive approach. What Happens in an Audit/Ruling? When a referral is made to the Rulings Directorate the assigned officer will generally begin by way of sending a written notice to the business owner. This letter will explain the purpose of the investigation and request that preliminary documentation, such as the contract with the worker, be provided for review. Normally the assigned officer will also ask for a telephone interview to be convened to discuss the relationship with the employer. In some cases, they may also conduct a field visit although this is becoming rarer as the CRA has moved to centralize these specialized divisions at certain specific Tax Services Offices to serve a large geographic area. The rulings officer will then normally contact the workers in question directly, initially via telephone and then to supplement their responses ask that a written questionnaire be answered. They may also ask for some proof of expenses paid related to their work, evidence of reimbursements or similar payments and any other documentary evidence that may be helpful in determining the form of the relationship. Based on the responses and the evidence provided by both the business and the worker, the rulings officer will then summarize the facts, apply the Wiebe Door and Sagaz factors and come to a determination. If a ruling is made that the workers were actually employees, this will normally trigger a full payroll trust examination if one is not already in progress. If an audit is in progress the Trust Examiner will use the ruling as the basis for increasing the income tax, CPP and EI withholdings for the relevant period. The conclusion of the trust examination will result in the issuance of reassessments for the income tax, CPP and EI withholdings, including interest and applicable penalties. The amounts will be due immediately – payroll assessments are not subject to the typical 90-day hold on collections as they are considered “trust funds” by the ITA, and so a referral will usually be made by the Trust Examiner immediately to the CRA’s collection division for follow-up. Additional Tax and Legal Considerations From the “employer’s” perspective, it should be noted that if the newly deemed employee has already reported and paid their taxes this will not relieve the employer of the obligation to pay which is mandated under the ITA; the reassessed amounts will be due and payable regardless. The result is a potential double tax that can be thought of as more akin to a penalty. One way to mitigate this may be to work together with the employee to refile their previous year’s tax returns to claim back a refund, though legal advice in this regard is paramount – if you are considering attempting this type of arrangement with an employee, advice from an experienced employment lawyer is advised due to the possibility of running afoul of the various employment or labour codes. This is beyond the scope of the author’s professional experience, but it is not hard to imagine a dispute arising, particularly in such a stressful context, if the employee is suddenly asked to refile their taxes in a particular way and to forward refunds to their employer – this could be taken by the employee as coercive behaviour for example. How such an issue would be treated under the labour codes and employment statutes is also not immediately clear to the author, but as with any dispute could end up being adding even more costs if litigation, arbitration or a workplace investigation ensues. From the “employee’s” perspective, the ability to deduct many typical business expenses from their income will be severely restricted. Unlike the rules applicable to business income, deductible expenses for employees are limited by section 8 of the ITA to those that are expressly permitted by that section. In addition, the employee will not be capable of claiming any deduction at all if they are not provided with a duly executed Form T2200 by their employer each year, setting out the specific expenses and nominal justification for their incurrence by the employee. This can lead to a higher tax cost for the employee overall and will require the employer’s active participation in creating and issuing the prescribed forms. It may also require that the parties redraft their written agreement. If there are any disputes, it may be wise for the aggrieved party to seek legal assistance in the same manner as advised above in the employers’ scenario. What if You Disagree with a Reassessment or Ruling? While a ruling that one is an employee is a formal administrative decision by the CRA, a taxpayer cannot object directly to the said ruling, rather the resulting reassessment and by extension, the underlying amounts imposed must be disputed. As stated above, a payroll audit encompasses the amounts of income tax withholdings, CPP and EI. Thus, when a “payroll” reassessment is issued, pursuant to a ruling or not, there are technically speaking three reassessments being created simultaneously, one under each of the three respective acts. Disputing these assessments is similar in concept to any other tax debt – a formal Notice of Objection must be filed within a 90-day period beginning on the date of the reassessment. For income tax assessments, as well as GST/HST assessments, it is common knowledge for practitioners that there is also a relieving provision that allows the taxpayer to request an extension of time to the 90-day objection period – so long as a formal extension request is filed within one year of the expiry of the initial 90-day period, the CRA can accept the objection as valid. What is not so widely known is that the Canada Pension Plan and the Employment Insurance Act have no corresponding mechanism; those acts contain no provision for the extension of time to file an objection and so if the initial 90-day period is missed, the reassessed amounts of CPP and EI will be deemed final and payable. The payroll amounts related to income taxes can however still be the subject of an extension of time request, though doing so will only solve part of the problem. Thus, taxpayers need to be extremely cautious with respect to the 90-day deadline to ensure that the amounts of CPP and EI, if incorrect, are objected to on a timely basis. Once the objections have been filed, from experience, the CRA will initially refer the CPP and EI portions of the objection to an Appeals Officer with specific knowledge of those particular acts for an initial decision, and that officer will then forward the file to a second Appeals Officer to handle the income tax portion. This can lead to longer than normal resolution times and may exacerbate collections issues if the account remains delinquent in the meantime. If the taxpayer is unsuccessful, they still retain a statutory right of Appeal to the Tax Court of Canada as with all other tax issues, though the 90-day period is strict for CPP and EI at this stage as well. Is Any Other Relief Available? If the taxpayer is not successful in the dispute process or does not wish to dispute, they can consider filing a Taxpayer Relief request to ask the CRA to cancel penalties or interest associated with the reassessments. Underlying principal amounts are not capable of being eliminated as a matter of law by a Taxpayer Relief request, so depending on the amount of interest and penalties this may or may not be worth the time and expense. The Taxpayer Relief Program and the cancellation of the penalties or interest are completely at the discretion of the CRA, and a high bar for relief is imposed. Those who may be considering such an application should seek legal advice and representation to ensure that their request is as effective and convincing as possible – CRA has published guidelines for when it will offer relief and so a good advocate can ensure the best chances of success. As Always, Seek Professional Representation From experience, a payroll trust examination, and if applicable the involvement of the Rulings Directorate can be an extremely confusing and stressful process. Those businesses that have concerns that there is a potential for the CRA to find an employment relationship, or that are in the midst of a payroll audit should seek advice from a professional that has experience managing the process. Proactive planning to avoid such a situation is obviously the most ideal scenario. That being said, if an audit is already in progress, professional advice and experience can often truncate the timeline and significantly reduce fees if help is brought in at the earliest possible stage. If you have questions about taking proactive steps or are in the midst of a payroll audit the author is happy to discuss how DSF can assist you to achieve the best possible outcome. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please contact a lawyer. Each case is unique and different and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” References: [1] Income Tax Act, RSC 1985, c 1 (5th Supp.). [2] Wiebe Door Services Ltd. v Minister of National Revenue, [1986] 2 CTC 200 (FCA). [3] 671122 Ontario Ltd. v Sagaz Industries, 2001 SCC 59. [4]1392644 Ontario Inc. [Connor Homes] v Canada (National Revenue), 2013 FCA 85. [5] TBT Personnel Services Inc. v Canada (National Revenue), 2011 FCA 256. [6] The original Tax Court decisions were issued under the “Informal Procedure” rules, which are akin to a provincial small claims court with a similar relaxed procedure and rules of evidence. Thus, while the Tax Court’s decision, in this case, is “persuasive” it technically did not set any binding legal precedent. [7] A detailed review of the “personal services business” rules are beyond the scope of this article, but in sum, the rules operate to ensure that those who are connected to a corporation cannot incorporate to achieve income deferral where they otherwise would have been an employee. [8] Canada Pension Plan, RSC 1985, c C-8. [9] Employment Insurance Act, SC 1996, c 23. By Justin DominicBlog, Employment Law, TaxFebruary 17, 2022March 24, 2022
Caselaw Update: Reasonableness and Enforceability of Mandatory COVID-19 Vaccination Policies in the Workplace This is an update to our blog originally posted on July 6, 2021. There is no federal or provincial legislation requiring eligible individuals to be vaccinated against COVID-19. However, employers may impose their own vaccination policies as part of a good faith effort to follow public health guidance, stop the spread of COVID-19 and protect their business interests. Whether these policies are enforceable is a question which must be decided by the courts—but they have yet to do so. Labour arbitration decisions provide insight as to which policies may be reasonable and in which circumstances. It is likely that employer policies with respect to COVID-19 will be enforceable only where reasonable in the full context of all the facts and circumstances. Mandatory vaccination for employees may be reasonable in high-risk circumstances, while the same policy may be unreasonable where practical alternatives exist. Conditions with respect to testing and other restrictions for unvaccinated employees are also likely reasonable. A policy will likely be enforceable only where it is carefully custom-tailored to the particular facts and adaptable to the circumstances of the workplace and the employees. There may be consequences for employees who breach their employer’s vaccination policy. Facts and circumstances are dynamic. The shifting conditions of the pandemic—such as the emergence of the Omicron variant—present additional challenges and considerations for employers. Dynamic facts demand constant vigilance to ensure that policies are adaptable and reflect the circumstances of the day. Background Employers have a statutory duty to safeguard the health and safety of their employees pursuant to the Occupational Health and Safety Act.[1] By law, an employer must take every reasonable precaution to maintain a safe working environment.[2] These steps include following COVID-19 public health guidance in good faith. For example, an employer may impose policies mandating physical distancing, masking, screening—and vaccination. In Ontario, there are statutory protections for liability as a result of potential exposures or infections to COVID-19 so long as that person was making “a good faith effort to act in accordance with public health guidance,” pursuant to Supporting Ontario’s Recovery Act.[3] Under the Recovery Act, “person” includes “any individual, corporation or other entity.”[4] However, the Recovery Act excludes protections for many employers; i.e., any employer in a schedule one or two industry (as defined by the Workplace Safety and Insurance Act). This specification is broad and nearly all-encompassing. These employers do not enjoy statutory protections from their employees for COVID-19 liability.[5] Therefore, it is possible that an employee who becomes infected with COVID-19 in the course of their employment may be able to sue their employer—even if that employer was making a good faith effort to follow public health guidance. These statutory protections and exclusions have not yet been tested by the courts.[6] The court will ultimately need to determine whether the employer took all reasonable steps in the circumstances to prevent a COVID-19 outbreak in the workplace. Public Advice About COVID-19 Vaccines According to the World Health Organization, there are “safe and effective vaccines that prevent people from getting seriously ill or dying from COVID-19.”[7] Its advice is to “take whatever vaccine is made available to you first, even if you have already had COVID-19.”[8] The Canadian National Advisory Committee on Immunization “strongly recommends a complete mRNA COVID-19 vaccine series” for all eligible persons.[9] As per Health Canada, “vaccination is one of the most effective ways to protect our families, communities and ourselves against COVID-19.”[10] The courts have taken judicial notice of the fact that “all responsible medical authorities, without exception, have urged people to become inoculated.”[11] While misinformation abounds, myths and disinformation about COVID-19 vaccines have been debunked.[12] The court has also noted that some of the spread of this misinformation is deliberate and malicious.[13] Not everyone can be vaccinated; e.g., for medical reasons or upon other protected grounds pursuant to the Human Rights Code.[14] Others may be hesitant, while some may make a personal choice to remain unvaccinated based on their individual, sincerely-held beliefs and preferences. Depending on the reason, the individuals may or may not be entitled to accommodation. Enforceability of Workplace Policies (Testing, Restrictions, Vaccination, and Disclosure of Vaccination Status) “I’m strongly recommending that local employers establish a workplace vaccination policy to protect workers, their families and our communities.”[15] – Dr. Eileen de Villa, Toronto Medical Officer of Health (August 20, 2021) Courts recognize that health units and medical officers (like Dr. de Villa) should be afforded “significant deference.”[16] In light of this recommendation, an employer might conclude that requiring all employees to be vaccinated is an “obvious and simple” step to prevent exposures, infections, or an outbreak in the workplace.[17] However, such an argument places the interest of health and safety on a collision course with the human rights and other interests of employees, such as privacy and bodily integrity. Courts will need to decide how to draw the line between these competing interests. At present, there is no case law from the civil courts. In the case of unionized workplaces, courts have held that unionized plaintiffs lack standing to challenge the enforceability of an employer’s vaccination policy in court.[18] In sum, this dearth of judicial opinion means that there is still no clear and specific guidance from the civil courts for employers who seek to draft an enforceable workplace policy with respect to COVID-19. However, labour arbitration decisions (“awards”) for unionized workplaces may provide some about how courts may eventually evaluate the merits and enforceability of employer vaccination policies.[19] In general, arbitral awards focus on the facts. Awards are the result of balancing the competing interests using a highly contextual approach, taking care to evaluate the particular circumstances of each case. Arbitrators look for specific details about dangers, hazards, and how certain problems may interfere with business.[20] Other important factors could include the nature of the business, the type of workplace, the kinds of services offered, and the characteristics of the employees. At the same time, arbitrators remain alive to the issue that facts and circumstances are dynamic and subject to change—evolving along with the shifting conditions of the pandemic (e.g., the emergence of the Omicron variant). Ultimately, arbitral caselaw has shown that policies will be enforced where they are reasonable in the circumstances. An enforceable policy will likely be prudent, strike the right balance between interests, appropriately mitigate actual risks, and reflect the practical realities of the day. In general, an enforceable policy will likely be custom-tailored to suit the parameters and realities of the workplace, and the work of the employees (i.e., it is not a policy which is “one size fits all”). There are four types of policies which have been considered by labour arbitrators thus far: testing, restrictions, vaccination, and disclosure of vaccination status. Testing In Caressant Care Nursing & Retirement Homes v Christian Labour Association of Canada—prior to the availability of vaccines—the employer, a nursing home, required all employees to be tested every two weeks or else be subject to discipline; i.e., be “held out of service.”[21] The testing would be conducted by the employer on-site. The union contended that testing seriously breached the employees’ right to privacy and dignity. The employer asserted that it was upon request from or upon recommendation by the Province of Ontario. It was decided in Caressant that testing all employees under this timetable was reasonable. A nursing home is a contained environment and COVID-19 is often deadly for the elderly. The goal of clearly controlling COVID-19 infection in that environment outweighed the minimal intrusion of a test. In Unilever Canada Inc v UFCW Local 175, the employer, a food manufacturing facility, required all employees to be tested every week.[22] No specific penalty for noncompliance was specified. The union contended that the policy breached the collective agreement and the Human Rights Code. The employer disagreed and maintained that its testing policy was reasonable. The arbitrator determined that testing all employees under this timetable was reasonable. Even where there was no evidence of transmission, the arbitrator decided that it was prudent to exercise caution given the nature of the workplace, which is governed by a variety of food safety regulations. In Ellisdon Construction Ltd v LiUNA Local 183, the employer, a construction contractor, required all employees to be tested twice per week or else not be permitted to access the worksite.[23] The testing would be performed on-site. The union claimed that employees had concerns that the testing was experimental, invasive, and unreliable. The employer contended that the safety of the workplace and of the general public was at risk. It was decided in Ellisdon that testing all employees under this timetable was reasonable. Given the fact that the residential construction industry is an essential service, its workers put themselves at risk to an extraordinary threat. Further, the risk is increased by the nature of the industry; i.e., whereby workers routinely move between job sites and employers. The goal of preventing the spread of COVID-19 outweighed the intrusiveness of testing. In Ontario Power Generation (OPG) v The Power Workers Union, the employer, a public business enterprise, required all unvaccinated employees to be tested twice per week or be subject to unpaid leave or termination.[24] The testing would be self-administered by employees, at the expense of the employer. The union contended that a termination penalty without a formal disciplinary process was unreasonable. The company asserted that it was a reasonable measure to mitigate risk. It was decided in OPG that testing unvaccinated employees under this timetable was reasonable. This arbitral award was a “decision driven entirely by context.” In the backdrop of a global pandemic which has cost tens of thousands of lives so far in Canada, it was decided that a minimally intrusive test as a condition for returning to work was both “sensible and necessary.” Restrictions In OPG, supra, it was also decided that limiting access to gyms and other fitness facilities only to vaccinated employees was reasonable.[25] For some employees, physical fitness and evaluation were mandated by virtue of the physically demanding nature of their position. However, gyms are high-risk areas for transmission by their nature. Therefore, requiring employees to be vaccinated to access private fitness facilities is sensible for the same reason that the Province of Ontario requires public gym patrons to be vaccinated in order to enter. Vaccination Mandating vaccination may not be possible at all for certain individuals who are unable to be vaccinated. Some people cannot be vaccinated for medical reasons. Others may be entitled to vaccination exemptions pursuant to protected grounds under the Human Rights Code, such as religion or disability. Under the Code, employers have a duty to accommodate these employees up to the point of undue hardship for the employer, having regard to cost and health and safety issues.[26] Such accommodations could include testing or other alternatives. However, an employer has no duty to accommodate an employee who chooses to remain unvaccinated based on their personal choice.[27] According to the Ontario Human Rights Commission (OHRC): Receiving a COVID-19 vaccine is voluntary. At the same time, the OHRC’s position is that a person who chooses not to be vaccinated based on personal preference does not have the right to accommodation under the Code. … Even if a person could show they were denied a service or employment because of a creed-based belief against vaccinations, the duty to accommodate does not necessarily require they be exempted from vaccine mandates, certification or COVID testing requirements. The duty to accommodate can be limited if it would significantly compromise health and safety amounting to undue hardship – such as during a pandemic.[28] With respect to a workplace vaccination policy, mandating vaccination may be reasonable where risks are high and vulnerable populations require protection. It may also be reasonable where necessary to comply with an existing contractual relationship; e.g., an employment agreement, collective agreement, or lease. In contrast, it may be unreasonable where practical alternatives exist; e.g., working remotely, physical distancing, masking, screening, or testing. In Electrical Safety Authority (ESA) v Power Workers’ Union, the employer required all employees to be fully vaccinated or be subject to discipline, up to and including termination—with allowances for bona fide exceptions.[29] Unvaccinated employees were to be subjected to regular testing. The union contended that the policy violated its members’ bodily integrity. The company argued that it was a reasonable safety precaution. It was decided in ESA that mandatory vaccination was unreasonable. The “vast majority” of employee work was conducted effectively remotely. Consequentially, it was decided that it would be unjust to discipline or terminate employees for being unvaccinated where reasonable alternatives exist. A testing option for the unvaccinated was reasonable. The ESA decision also affirmed that under different circumstances, mandatory vaccination policies may indeed be reasonable. For example, in contexts where the risks are high and vulnerable populations require protection. The arbitrator specifically articulated that this particular decision was not “vindication” for those who choose to remain unvaccinated; i.e., “those who continue to refuse to be vaccinated are not just endangering their health but may also placing their employment in jeopardy.” In Power Workers Union v Elexicon Energy Inc, the employer, a hydro service provider, required all employees to be vaccinated or else they must complete “vaccine awareness training” and be placed on unpaid leave or be terminated.[30] The union supported voluntary vaccination and mandatory testing but drew the line at mandatory vaccination. It asserted that in light of the highly transmissible Omicron variant, vaccination does not prevent an infected person from transmitting COVID-19 to others. It was decided in Elexicon that mandatory vaccination was reasonable only for employees who (a) do not work from home, or (b) do not work entirely outside. The employer is a provider of essential services and it must be assured that its workforce is capable of providing electricity to the community.[31] The fact that Omicron may be more transmissible notwithstanding vaccination does not affect the employer’s duty to be cautious nonetheless—even against unknown harms. However, for employees who exclusively work from home, mandatory vaccination was unreasonable. Likewise, it would be unreasonable for employees who work entirely outside or who can be reasonably accommodated to work entirely outside. In Bunge Hamilton Canada v UFCW Local 175, the employer, an agricultural supplier, required all employees to be fully vaccinated or else they may be placed on unpaid leave pending a review of their employment status—with allowances for bona fide exceptions.[32] The union contended that it was unreasonable to discipline employees for being unvaccinated. The company asserted that the policy was necessary to prevent a variety of factors from materially interfering with its business, including complying with the terms of its lease. It was decided in Bunge that mandatory vaccination was reasonable. In brief, the policy was reasonable because mandatory vaccination was already the policy of the federally-regulated organization from which the business leased property for its operations (i.e., a port authority). If the employer permitted unvaccinated employees to come on-site, it would be in breach of its obligations under its lease. Testing was not a suitable alternative within this context. Finally, in UFCW Local 333 v Paragon Protection Ltd, the employer, a security company, required all employees to be fully vaccinated or be terminated—with allowances for bona fide exceptions.[33] The union contended that many of it members held genuine reservations due to concerns about the side effects of vaccinations. Some members objected to the choice between vaccination or termination. The company contended that this policy was supported by an existing collective agreement, and necessary as it was a “client customer-facing business” and the majority of its clients already required its employees to be fully vaccinated. It was decided in Paragon that mandatory vaccination was reasonable. Conveniently, an article in the collective agreement mandated employees agrees to vaccinations. This provision was remarkably prescient; it was agreed to in 2015 and did not contemplate a pandemic. However, the arbitrator also concluded that the vaccination policy balanced the rights of employees, other staff, clients, and members of the public. The arbitrator noted that “personal subjective perceptions of employees to be exempted from vaccinations cannot override and displace available scientific considerations.” Disclosing vaccination status In ESA, supra, it was decided that a policy requiring an employee to disclose medical information (such as vaccination status) “must be reasonably necessary and involve a proportionate response to a real and demonstrated risk or business need.”[34] For example, in Bunge, supra, a requirement for an employee to disclose their vaccine status to the employer was held to be reasonable.[35] Specifically, such disclosure would be a minimal intrusion into the employee’s right to privacy and was considerably outweighed by “enormous public health and safety interests.” In Teamsters Local Union 847 v Maple Leaf Sports and Entertainment (MLSE), an employee was placed on unpaid leave for failing to disclose his vaccination status.[36] The employer, a professional sports team operator, required its employees to be fully vaccinated or be placed on unpaid leave or be terminated. The employee worked at the Scotiabank Arena in close proximity with others. The employer’s policy was enacted the day after the Province of Ontario required patrons who attended events in the area to be fully vaccinated. The union did not dispute the vaccination mandate but contended that an employee’s vaccination status is private and should not be subject to disclosure. The employer asserted that being vaccinated for COVID-19 was a necessary employee qualification. The arbitrator determined that opposing disclosure of vaccination status is akin to opposing the vaccine mandate. The arbitrator stated, “I do not see how the Employer can enforce a vaccine mandate without requiring disclosure of an employee’s vaccine status.”[37] The arbitrator decided that the policy was reasonable and the unpaid leave was an appropriate outcome. When personal health information, such as vaccination status, is disclosed, privacy concerns must be addressed. Employers must keep the information confidential, safe, and secure. In MLSE, the arbitrator concluded that the employer had taken the appropriate steps to protect employee confidentiality. Purpose of Workplace Policies and the Shifting Conditions of the Pandemic (e.g., Omicron) The stated purpose of a policy may affect its reasonableness and enforceability. An employer may enact a policy with respect to COVID-19 for a variety of purposes. Such purposes may include but are not limited to: improve health and safety, promote vaccine safety education, improve workplace attendance, protect business interests or stop the spread of COVID-19. In November 2021, the Omicron variant of COVID-19 was identified.[38] It is far more transmissible than the original virus and it is expected that it can spread to vaccinated individuals.[39] This heightened risk of transmission has caused the Ontario Chief Medical Officer of Health, Dr. Kieran Moore, to reassess even having a public vaccine passport system at all.[40] As of March 1, 2022, the vaccine passport system in Ontario will end (although businesses will be permitted to continue to use the province’s proof of vaccination system, should they wish to do so) If the purpose of an employer’s mandatory vaccination policy is to reduce the spread of COVID-19, then it could be argued that the policy lacks a rational connection to the goal in light of Omicron. Stopping the spread of COVID has indeed been the stated purpose of many of the employer vaccination mandate policies considered in labour arbitrations to date. In Bunge, the purpose was to “prevent the spread of COVID-19.”[41] In ESA, the purpose was aimed at “limiting the risk of contracting and spreading the virus.”[42] However, other policies have considered transmission and harms, or have been more general in nature. For example, in OPG, the policy was aimed at “mitigating the risk of harm from, or transmission of, COVID-19 in the workplace.”[43] In contrast, in Paragon, the policy was to “minimize potential incidents of COVID-19 in the workplace.”[44] While vaccinations may be less effective in preventing the spread of the Omicron variant, it is expected that vaccines will remain effective in preventing severe illness, hospitalizations, and death from COVID-19.[45] Consequentially, employers should ensure that a mandatory vaccination policy has a purpose which is rationally connected to its means. As an example, a policy which is focused on reducing the harms caused by COVID-19 may be more reasonable than a policy focused on preventing the spread of COVID-19—in light of Omicron. However, even in light of the uncertainty of Omicron, employers should be cautious and guard against the unknown anyway. As stated in Lexicon: The Union’s argument that there is no evidence vaccinations will be more effective in preventing the spread of Omicron, even in conjunction with testing, masking, and distancing, than those measures alone without vaccination, is inconsistent on these facts with the precautionary principle which justifies that action be taken to protect employees where health and safety are threatened “even if it cannot be established with scientific certainty that there is a cause and effect relationship between the activity and the harm. The entire point is to take precautions against the as yet unknown.”[46] Nonetheless, employers should remain cognizant that there are multiple forms of harm which employees may suffer during a pandemic; e.g., mental health harms. Some employees may have mental health conditions that result in elevated anxiety towards receiving vaccination—such anxiety may amount to a disability. In the pre-pandemic era, debilitating mental health issues would have been a recognized legal disability. In the pandemic era, medical licensing bodies have restricted doctors from granting medical exemptions for vaccination on these grounds. The purpose of a vaccination policy should provide for reasonable protections and reasonable accommodations for people who may be at risk of various types of harm, including mental health harms. As the conditions of the pandemic continue to be dynamic and continue to evolve, it would be prudent to stay up to date with public health guidance to ensure that any employer policies are continuously tailored and re-adjusted to the factual realities of the day. For example, the definition of “fully vaccinated” may evolve if more booster vaccinations become the norm, perhaps as a response to Omicron and other future variants. Policies are neither “one size fits all,” nor are they “set it and forget it.” Consequences for Employees who Defy COVID-19 Policies Labour arbitrators have also considered the appropriate consequences for employees who fail to comply with COVID-19 policies, or who engage in otherwise untenable conduct in the context of the pandemic. For the most egregious violations, termination may be reasonable. In Garda Security Screening Inc v IAM, District 140, in the very early days of the pandemic, an employee was terminated for failing to self-isolate after being tested for COVID-19, as per the policy of the employer.[47] It was concluded that the employee clearly violated the employer’s policy and public health guidance and that her actions put “countless others at risk of illness or death.”[48] The employee tested positive—after working alongside her coworkers in proximity. This termination was held to be reasonable. In LiUNA OPDC v Aecon Industrial, an employee was terminated for providing false information in response to a COVID-19 screening.[49] The employee was experiencing symptoms and was advised that he could not attend work. However, the employee returned to work and falsely answered screening questions in the negative. Consequentially, the employee was terminated. The decision concluded that the employee’s “deliberate and cavalier attitude toward the COVID safety risks he represented both to his co-workers and in turn to the Company’s obligations to protect the workplace was unconscionable, unreasonable and totally unacceptable.”[50] This termination was held to be reasonable. In Ryam Inc Forest Products Group Chapleau Sawmill v USW Local 1-2010, an employee was suspended without pay for three (3) months for removing his face mask in the workplace and threatened to give his supervisor COVID by pretending to spit in his direction.[51] The arbitral decision reduced the suspension to two (2) months. Although the circumstances were very serious, the employee was afforded some leeway by virtue of his four decades of service and lack of disciplinary history. Where an employee does not comply with a mandatory vaccination policy Whether termination for being unvaccinated or failing to comply with an employer’s policy is reasonable depends on the facts. Nonetheless, Employment and Social Development Canada has issued guidance to employers with respect to completing Records of Employment (ROE). How an ROE is completed will affect the employee’s eligibility for Employment Insurance (EI). The guidance is specifically as follows:[52] When the employee doesn’t report to work because they refuse to comply with your mandatory COVID-19 vaccination policy, use code E (quit) or code N (leave of absence). When you suspend or terminate an employee for not complying with your mandatory COVID-19 vaccination policy, use code M (dismissal or suspension). If you use these codes, we may contact you to determine: if you had adopted and clearly communicated to all employees a mandatory COVID-19 vaccination policy if the employees were informed that failure to comply with the policy would result in loss of employment if the application of the policy to the employee was reasonable within the workplace context if there were any exemptions for refusing to comply with the policy Conclusion Employers may impose policies with respect to COVID-19 as part of their statutory obligation to safeguard the health and safety of their employees. In following COVID-19 public health guidance in good faith, employers may impose policies with respect to physical distancing, masking, screening, and vaccination. However, mandating vaccination also engages the interests of employees. A balancing exercise is necessary to ensure that any intrusions upon the employee’s rights are reasonable. Courts have not (yet) provided any guidance to employers with respect to what kind of policies will be enforceable. However, labour arbitration decisions may yield insight as to what kinds of policies will be enforced by the courts; i.e., policies which are reasonable in light of all of the circumstances. These decisions are driven by context and were highly sensitive to the particular facts of each case. What may be reasonable in one set of circumstances may be unreasonable for another—and circumstances may change. Important factors could include the nature of the business, the type of workplace, the kinds of services offered, and the characteristics of the employees. Some key generalizations emerge from the arbitral decisions. Testing or restricting the unvaccinated is likely reasonable. Mandating vaccinations may be reasonable under the circumstances; e.g., where risks are high and a vulnerable population requires protection. Lastly, requiring an employee to disclose their vaccination status is also likely to be reasonable. Reasonableness is highly contextual and requires specificity with respect to particular hazards and forms of interference with the business. It is critical to ensure that any COVID-19 policy is adaptable and custom-tailored to the realities of the employees, the workplace, and of the pandemic itself. Where employees violate these policies, penalties may result. Omicron is an example of how the ever-shifting realities of the pandemic will require constant vigilance from employers to ensure that policies reflect the realities of the day. Keeping employees safe requires a continuous contextual analysis. Ultimately, the key fact in any contextual analysis may be that in Canada, tens of thousands of lives have been lost to COVID-19—and the pandemic is not over. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” [1] RSO 1990, c O.1 [OHSA]. [2] Ibid, s 25(2)(h). [3] SO 2020, c 26, Sched 1 at s 2(1) [Recovery Act]. [4] Ibid at s 1(2). [5] Ibid at s 4; Workplace Safety and Insurance Act, 1997, SO 1997, c 16, Sched A; with exceptions; see: O Reg 175/98. [6] There are proposed class actions before the courts; e.g., Nisbet v Ontario, 2021 ONSC 3072. [7] “COVID-19 advice for the public: Getting vaccinated” (15 November 2021), online: World Health Organization <who.int>. [8] Ibid. [9] “Vaccines for COVID-19: How to get vaccinated” (14 January 2022), online: Government of Canada <canada.ca>. [10] “COVID-19: Effectiveness and benefits of vaccination” (14 December 2021), online: Government of Canada <canada.ca>. [11] R v Kongolo, 2021 ONSC 6619 at para 41 [Kongolo] citing R v Frampton, 2020 ONSC 5733 at para 6. [12] “The 12 Common Myths & Misconceptions About COVID-19 Vaccination” (19 May 2021), online: United Nations <un.org>. [13] Kongolo, supra note 11 at para 40. [14] Ontario, Ministry of Health, Medical Exemptions to COVID-19 Vaccination, version 3.0 (Toronto: 12 January 2022); RSO 1990, c H.19 [HRC]. Note: where an employee requires accommodation under the Code, an employer is required to provide such accommodation up to the point of undue hardship. [15] “Toronto Medical Officer of Health strongly recommending Toronto employers institute COVID-19 vaccination policy and support workplace vaccination” (20 August 2021), online: City of Toronto <toronto.ca>. [16] The Fit Effect v Brant County Board of Health, 2021 ONSC 3651 (CanLII) at para 88. [17] Electrical Safety Authority v Power Workers’ Union (7 November 2021) arbitrator: John Stout at para 33 [ESA]. [18] Blake v University Health Network, 2021 ONSC 7139 (CanLII) at para 15; Amalgamated Transit Union, Local 113 v Toronto Transit Commission and National Organized Workers Union v Sinai Health System, 2021 ONSC 7658 (CanLII) at para 3. [19] E.g., the Supreme Court endorsed a line of arbitral decisions which outlined the circumstances under which testing for drugs and alcohol might be permitted; see: Communications, Energy and Paperworkers Union of Canada, Local 30 v Irving Pulp & Paper, Ltd, 2013 SCC 34. [20] ESA, supra note 17 at para 26. [21] Caressant Care Nursing & Retirement Homes v Christian Labour Association of Canada, 2020 CanLII 100531 (ON LA). [22] Unilever Canada Inc v United Food and Commercial Workers, Local 175 (24 April 2021) arbitrator: Jules B Bloch [Unilever]. [23] Ellisdon Construction Ltd v Labourers’ International Union of North America, Local 183, 2021 CanLII 50159 (ON LA) [Ellisdon]. [24] Ontario Power Generation v The Power Workers Union (8 November 2021) arbitrator: John C Murray [OPG]. [25] Ibid. [26] “OHRC Policy statement on COVID-19 vaccine mandates and proof of vaccine certificates” (22 September 2021), online: Ontario Human Rights Commission <ohrc.on.ca>. [27] Ibid. [28] Ibid. [29] ESA, supra note 17. [30] Power Workers Union v Elexicon Energy Inc, 2022 CanLII 7228 (ON LA) [Elexicon]. [31] Ibid at paras 7, 79. [32] Bunge Hamilton Canada, Hamilton, Ontario v United Food and Commercial Workers Canada, Local 175 (13 December 2021) arbitrator: Robert J Herman [Bunge]. [33] United Food and Commercial Workers Union, Canada Local 333 v Paragon Protection Ltd (9 November 2021) arbitrator: F R von Veh [Paragon]. [34] ESA, supra, note 17 at paras 37-38. [35] Bunge, supra note 32 at paras 23, 25. [36] Teamsters Local Union 847 v Maple Leaf Sports and Entertainment (12 January 2022) arbitrator: Norm Jesin [MLSE]. [37] Ibid at para 20. [38] “Update with consideration of Omicron – Interim COVID-19 infection prevention and control in the health care setting when COVID-19 is suspected or confirmed– December 23, 2021” (24 December 2021), online: Government of Canada <canada.ca> [Omicron, Canada]. [39] Ibid; “Omicron Variant: What You Need to Know” (2 Feb 2022), online: Centres for Disease Control and Prevention <cdc.gov> [CDC]. [40] Sean Davidson, “Ontario needs to ‘reassess the value’ of COVID-19 vaccine passport system, top doctor says” (3 February 2022), online: CTV News <ctvnews.ca>. [41] Bunge, supra note 32. [42] ESA, supra note 17. [43] OPG, supra note 24. [44] Paragon, supra note 33. [45] CDC, supra note 39. [46] Elexicon, supra note 30 at para 6, citing Ontario Nurses Association v Eatonville/Henley Place, 2020 ONSC 2467 (CanLII) at para 78. [47] Garda Security Screening Inc v IAM, District 140 (Shoker Grievance), [2020] OLAA No 162 [Garda]. [48] Ibid at para 15. [49] Labourers’ International Union of North America, Ontario Provincial District Council and Labourers’ International Union of North America, Local 183 v Aecon Industrial (Aegon Construction Group Inc), 2020 CanLII 91950 (ON LA) [Aecon]. [50] Ibid at para 4. [51] Ryam Inc Forest Products Group Chapleau Sawmill v United Steelworkers Local 1-2010, 2021 CanLII 61491 (ON LA) [Ryam]. [52] “EI information for employers – COVID-19” (24 December 2021), online: Employment and Social Development Canada <canada.ca>. By Justin DominicBlog, COVID-19, Employment LawFebruary 17, 2022February 17, 2022