May 2022 - Stacey R. Ball

Non-Compete Provision Upheld Notwithstanding Working for Workers Act, 2021

by Stacey R. Ball| May 31, 2022August 14, 2023 | Employment Law

In November 2021, the Ontario government passed the Working for Workers Act, 2021, new legislation that, among other things, prohibits non-competition clauses in employment agreements. However, a recent decision of the Ontario Superior Court revealed a reluctance to apply the prohibition to non-compete clauses that already exist.

Parekh et al v. Schecter et al The Facts

The Plaintiffs, in this case, are a dentistry where the Defendants used to work. The Defendants entered into an employment contract in 2020, known as an Associate Agreement, which contained restrictive covenants included a non-competition clause. The clause stated:

“Non-Competition. The Associate shall not during the Term of this Agreement and for two (2) years thereafter, either directly or indirectly, whether as a proprietor, partner, shareholder, employee, associate or otherwise, carry on or be engaged in the practice of dentistry anywhere within a five (5) kilometre radius of the Premises.”

Consequently, the Defendants could not work at another dentistry within a five (5) kilometre radius of the Plaintiff’s business.

In 2021, one of the Defendants resigned and began working at different dentistry. However, this new dentistry actually fell within the prohibited 5 km radius of the Plaintiff’s business. There, the Defendant had violated the non-competition term of the employment contract and the Plaintiffs sought to have it enforced by means of an injunction.

Should the Non-Competition Clause be Enforced?

The trial judge began by addressing the effect of the Working for Workers Act, 2021. This new piece of legislation added the following provision to the Ontario Employment Standards Act:

67.2 (1) No employer shall enter into an employment contract or other agreement with an employee that is, or that includes a non-compete agreement.

The Employment Standards Act further defines non-compete agreements as:

an agreement, or any part of an agreement, between an employer and an employee that prohibits the employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer’s business after the employment relationship between the employee and the employer ends.

In this case, the Defendants argued that the above statutory prohibition of non-competition agreements invalidated the non-competition clause of the Associate Agreement. The Defendant argued the legislation applies retroactively, such that non-competition agreements that existed prior to the legislation being enacted are likewise invalidated by the legislation.

However, the trial judge disagreed, suggesting that the Defendant confused the terms “retroactivity” with “retrospectivity.” Retroactive statutes operate at a time prior to their enactment (operating backwards), whereas retrospective statutes operate for the future only (operating forwards). Thus, their effect is prospective. The Defendant used the term “retroactive”, although the trial judge believed they meant to say “retrospective”.

Regardless of which is the proper characterization, it was the trial judge’s opinion that “the legislation does not apply to void the non-compete clause in the Associate Agreement entered into on January 20, 2020.” According to section 34(3) of the Working for Workers Act, 2021, the new non-compete provisions were deemed to come into force on October 25, 2021. This represented an express legislative intent to make the new Employment Standards Act amendments applicable as of October 25, 2021, and not earlier. Therefore, according to the trial judge, “it cannot be said the provisions with respect to the non-compete clause applies to contracts of employment with non-compete clauses entered into before October 25, 2021.”

The Takeaway

Based on the above, non-compete clauses that existed prior to October 25, 2021, will continue to be enforced in Ontario courts notwithstanding new legislation prohibiting such provisions. They must, however, continue to pass the common law test for injunctions, which is not so easily met.

Non-compete clauses entered into after October 25, 2021, will inevitably be found to be unenforceable. However, some may say this is not good enough. It remains arguable whether the legislation should invalidate non-compete clauses existing prior to October 25, 2021 as well as after.

Healthcare Worker Terminated for Refusing Vaccine

by Stacey R. Ball| May 29, 2022August 14, 2023 | Cause For Dismissal| | General

Vaccine related decisions continue to be made as we move closer to the halfway point of 2022. We have discussed a number of these decisions in earlier blog posts: see here, here, here, and here, to name a few. Today we write about a decision made on April 4, 2022, concerning the vaccination status of a healthcare worker at the Fraser Health Authority (FHA), one of five publicly funded healthcare regions of British Columbia.

Fraser Health Authority v British Columbia General Employees’ Union: The Facts

The employee in this case was Ms. Capozzi. She had been working as a substance abuse counsellor at FHA since February 2014 and had a discipline-free record. However, Ms. Capozzi was unvaccinated, and she had “absolutely” no intention of ever becoming vaccinated. It was her view that the vaccination requirement was “unlawful”. This was unacceptable to FHA. The Provincial Health Officer of BC announced on September 13, 2021, that all health authority employees must obtain their vaccinations to be eligible to work. According to this order, Ms. Capozzi was ineligible to work because of her refusal to be vaccinated.

Ms. Capozzi was terminated on November 25, 2021. In her Union’s view, there was no just and reasonable cause for terminating Ms. Capozzi as reasonable alternatives, such as an unpaid leave of absence, was available. On the other hand, FHA argued Ms. Capozzi was terminated for just cause for dismissal due to her inability to work in compliance with the mandatory vaccination order.

The Arbitrator’s Decision: The COVID-19 Pandemic

Before turning her mind to the merits of Ms. Capozzi’s termination, Arbitrator Koml Kandola had this to say generally about the COVID-19 pandemic:

“For over two years, the COVID-19 pandemic has been an unprecedented health emergency here and across the globe. As a communicable disease, it has had far-reaching impacts, including serious health consequences up to and including death. It has taken a major toll on our health care system and staff.”

Clearly, Arbitrator Kandola regarded the COVID-19 pandemic as a very serious health emergency. Such a view obviously does not bode well for an employee wishing to remain unvaccinated. Arbitrator Kandola is not alone in this view. Other arbitrators, such as Arbitrator John Stout in his decision in Electrical Safety Authority (as discussed in this blog post), have also taken the view that COVID-19 is a serious problem and that vaccines are a necessary means of addressing it. This understanding and perception of the COVID-19 pandemic formed the backdrop of the Arbitrator’s decision.

The Arbitrator’s Decision: Just and Reasonable Cause

Arbitrator Kandola was very clear in her reasons that the present grievance concerning Ms. Capozzi’s termination had nothing to do with the validity of the employer’s mandatory vaccine policy, nor the reasonableness of the policy implemented by the Provincial Health Officer of BC. Rather, Arbitrator Kandola stated this case was about whether FHA had just and reasonable cause to terminate Ms. Capozzi in the context of the provincial policy. There is no dispute the policy applied to Ms. Capozzi, as it applied to all health sector employees in the province. Under that policy, Ms. Capozzi is undoubtedly ineligible to work.

FHA repeatedly advised Ms. Capozzi of the requirement that she be vaccinated. FHA encouraged her on a number of occasions to obtain her vaccination and provided her multiple opportunities to do so. FHA provided Ms. Capozzi with express notice of the consequences of her failure to be vaccinated. In spite of all this, Ms. Capozzi remained unvaccinated and intended to remain unvaccinated in the future. In choosing to remain unvaccinated, Ms. Capozzi intentionally rendered herself unable to work.

Due to Ms. Capozzi’s own decisions, Arbitrator Kandola found there was “no path forward” in terms of continued employment. In her view, FHA had compelling reasons for terminated Ms. Capozzi’s employment, and she believed no lesser alternative was reasonably available.

In these circumstances, the termination was just and reasonable. Ms. Capozzi’s grievance was therefore dismissed.

Extended Reasonable Notice Due to COVID-19 Not Unique to Ontario Employees

by Stacey R. Ball| May 28, 2022August 14, 2023 | General

In an earlier blog post, we discussed the potential for courts to increase the notice periods awarded to employees where they are able to demonstrate clear mitigation efforts notwithstanding the many difficulties arising from the COVID-19 pandemic. At least two Ontario decisions have confirmed this possibility: Kraft v. Firepower Financial Corp. and Pavlov v. The New Zealand and Australian Lamb Company Limited. A more recent decision now suggests that Ontario is not the only Province taking this approach to determining reasonable notice of termination periods.

Miller v. Luminultra Technologies Ltd.: The Facts

This is a decision of the New Brunswick Court of Queen’s Bench. It concerned the termination of employment without cause of Ms. Miller, a 56-year-old employee of the Defendant employer. She was initially employed in 2014 as a marketing officer but held the position of Strategic Marketing Manager at the time of her termination in 2020. Ms. Miller, therefore, worked for the Defendant employer for just under six years.

When Ms. Miller was fired, she was offered a total severance of six months, inclusive of salary and benefits.

Was Six Month’s Severance Sufficient?

At common law, an employer has an obligation to provide an employee with reasonable notice of termination or pay in lieu of that reasonable notice where the employee has been terminated without cause. The goal is to provide the dismissed employee with enough notice to secure alternative employment. There is, however, no formula for determining what amounts to “reasonable notice”. It must instead be determined with reference to each particular case. Factors which are likely to make securing alternative employment more difficult will often point towards a greater notice period being awarded in order to compensate for that increased difficulty. This is why, for example, we see greater notice periods being awarded to older employees, as it is assumed they will have a more difficult time finding new employment than younger employees.

Notably, Ms. Miller was dismissed from her employment approximately two months into the COVID-19 pandemic. As we are all well aware, the COVID-19 pandemic has had a damaging impact on the labour market. Many businesses have struggled and as a result have been unwilling to hire. According to the New Brunswick Court, Ms. Miller made “extensive efforts” to find new employment with no success. The Court acknowledged:

“While there is no evidence in the Record of the specific impact of the pandemic on Ms. Miller or the job sector in which she was seeking employment, there can be little doubt that the pandemic and the shutdowns associated with it would have had some impact on Ms. Miller’s ability to find new employment.”

The Court had to decide whether or not to extend Ms. Miller’s reasonable notice period as a consequence of her COVID-related difficulties in searching for new employment. The Court wrote:

“I agree with the reasoning in Iriotakis that the pandemic is one of many factors to be considered when assessing reasonable notice. I also agree that termination at the point in the pandemic when the Plaintiff was terminated would tend to “tilt” the reasonable notice towards a longer range.”

Based on the above, and in considering Ms. Miller’s age and length of service, the Court determined the reasonable notice period in her case to be ten months. This is an extension of two months over the approximate average of eight months for individuals in Ms. Miller’s circumstances.

One Unlikely Story, One Voluntary Resignation

by Stacey R. Ball| May 27, 2022August 14, 2023 | General

In an earlier blog post, we discussed the possibility of employees rescinding, or “taking back”, their resignations. Much of that discussion focused on what makes a resignation valid. In a recent decision of the Ontario Superior Court, the issue of whether a resignation was indeed valid or not was raised once again.

Miller v Ontario Potato Distribution Inc.: The Facts

The Plaintiff employee in this case worked for the Defendant as a “lumper”. He had been with the Defendant for approximately 11.5 years. On April 29, 2020, the Plaintiff verbally resigned from his employment in the middle of his shift and signed a written confirmation of his resignation.

Why had he resigned? According to the Plaintiff, he resigned after a threatening incident led to him feeling unsafe in the workplace. In his view, the incident was evidence of a hostile environment that gave rise not to resignation but to a constructive dismissal.

What had made the Plaintiff feel so unsafe at work? He explained that on the morning of his resignation or constructive dismissal, he was led outside by a supervisor to a mysterious car parked in the parking lot. Outside the vehicle was, as the Plaintiff described, a “very tall man in a trench coat.” According to the Plaintiff, the man said he knew about the text messages the Plaintiff had been sending to a supervisor named Kim, and told him “it stops now and when your program is over so are your benefits.” The man then allegedly pointed his fingers in the Plaintiff’s face “like a gun.” When the Plaintiff told his supervisor he no longer felt safe at the facility, he was forced to sign a document and leave.

The Defendant’s Version of Events

The Defendant told a very different story about what happened that day. It was the Defendant’s evidence that the Plaintiff was not led outside by a supervisor and directed to approach a mysterious car. Rather, the supervisor had simply sent the Plaintiff outside for a customary smoke break because he was a smoker. He was never instructed to do anything further. The supervisor did not even go outside with the Plaintiff.

When the Plaintiff returned from his smoke break, he approached the supervisor and sad he “could not do it anymore” but did not explain. The Plaintiff then asked for a resignation form, which the supervisor provided. The Plaintiff signed it and did not seem confused about what he was signing.

Who Did the Court Believe?

The burden of proof rested with the Plaintiff to establish on a balance of probabilities that the parking lot incidence actually occurred and that the Defendant was involved in it or directed it. Ultimately, the Court held the Plaintiff failed in discharging his onus.

The Court assessed the Plaintiff’s credibility with reference to an often cited decision of the British Columbia Court of Appeal, Faryna v. Chorny, which provides:

“The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions …”

Ultimately, the Court did not believe the Plaintiff’s version of fact was in “harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions.” The Plaintiff therefore failed to discharge his burden of proving that the events alleged actually occurred. As such, the Court could not find that he had been constructively dismissed.

What Does This Mean For His “Resignation”?

In order to be valid and enforceable, a resignation must be clear and unequivocal. It must objectively reflect an intention to resign, or conduct evidencing such an intention to resign. It must be voluntary. If a resignation is made in a spontaneous outburst during a highly emotional situation, its voluntariness may be in doubt. Furthermore, a resignation may actually be “taken back” by the resigning employee if the employer had not yet relied on the resignation to its detriment.

However, because the authenticity of the Plaintiff’s alleged parking lot encounter had been disproven, the voluntariness of the Plaintiff’s resignation could not be said to have been made during a highly emotional situation. The Plaintiff did not resign under any duress. His resignation, therefore, must have been voluntary. At no point afterward did he seek to take back his resignation.

As a consequence of all the above, the Court held the Plaintiff to have voluntarily resigned.

Threats in the Workplace: Cause for Termination

Workplace violence, as defined under the Ontario Occupational Health and Safety Act, includes not only physical violence but also statements or behaviour that can be interpreted as threats of violence. The Act further imposes an obligation on employers to take every precaution reasonable in the circumstances for the protection of a worker. It should come as no surprise, therefore, that making threats of violence in the workplace may constitute just cause for dismissal. This holds true not only in Ontario but elsewhere in Canada, even in the federal context. The Canada Labour Code, for example, strictly prohibits workplace violence.

For one banking employee, this lesson was learned the hard way.

Awuah v. Bank of Nova Scotia: The Facts

The employee in this case was a rather disgruntled bank employee. He was very unhappy with his job – he did not like the customers, the Branch Manager, or his direct supervisor. He made little effort to hide the fact. He was a little too candid in one of his conversations with a co-worker. In discussing his work with the co-worker, the employee allegedly stated: “I am so mad right now, I could just shoot someone.” He doubled down on the statement, further adding: “I am serious, if I had a gun right now I would shoot someone, I would shoot everyone.”

His co-worker took these comments very seriously. They recorded in writing what the employee said and emailed the conversation to their manager. The employee was subsequently suspended without pay and told not to come in to work. The police were contacted.

The employee argued that he did not make the statements attributed to him. The police, after interviewing him, determined that he was not a threat. However, this was not enough to save the employee’s job. He was ultimately fired for cause as a result of his comments. He did not return his keys, so it became necessary to re-key the entire office. Clearly, they continued to believe the employee posed a genuine risk. In the Bank’s view, “threats of gun-related violence [were] among the most extreme forms of threat and the Bank has an obligation to its employees and customers to take all necessary steps to prevent such conduct.” In the circumstances, no form of progressive discipline was required.

The employee, who denied ever making such threatening statements, sought a finding that he was unjustly dismissed and asked that he be reinstated.

Was the Employee Unjustly Dismissed?

The burden of proof lied with the Bank, which must prove it had just cause to discipline the employee and that termination was an appropriate discipline. This really depended on two things: had the employee made the threatening comments, and if so, was termination warranted in all the circumstances?

There was conflicting evidence over whether or not the threatening comments were made. The employee said they were not, the co-worker said that they were. It was his word against hers. In these situations, the credibility of the witness must be carefully examined. The co-worker was the only witness to the alleged statements. She observed the employee’s tone and demeanour and was alarmed by what he said. She did not believe he was joking. Rather, she believed his anger was very real. The adjudicator found her evidence compelling for a number of reasons:

There was no dispute the employee was dissatisfied with his job at the Bank;
There was no dispute the employee and the co-worker worked in adjacent offices and regularly consulted one another on client matters;
The normalcy of the typical business relationship between the employee and co-worker was completely at odds with a level of animosity so intense that she would falsely accuse him of threatening to shoot others. The evidence of their relationship suggested there was trust and respect between them;
The co-worker’s recollection of the conversation was likely accurate because she had been alarmed by what he said and wrote out the conversation while it was fresh in her mind;
The co-worker was a successful bank employee, early in a promising career, who had nothing to gain from falsely accusing a junior colleague of threatening violence.

Based on the above, the employee’s claim that the co-worker made up the threatening statements was “impossible to accept.” For that reason, it was held that the employee had indeed made the threatening comments attributed to him.

Was his termination an appropriate penalty, in light of the fact he made such statements? The employee was aware that his comments were contrary to the Banks’ policies on preventing violence in the workplace and he was aware that misconduct of this nature could lead to immediate dismissal. The employee failed to recognize the seriousness of this type of conduct. This did not bode well for his rehabilitative potential. Further, he was not honest when giving evidence at the hearing. His dishonesty raised doubts as to whether the trust necessary for a viable employment relationship could be re-established.

Based on all the circumstances, his claim of unjust dismissal was denied.

British Columbia Court Finds Employee Handbook Unenforceable

by Stacey R. Ball| May 25, 2022August 14, 2023 | General

In a 2021 decision of the British Columbia Supreme Court, Verigen v Ensemble Travel Ltd., an issue was raised regarding whether an employee handbook was enforceable such that employees would be limited upon the termination of their employment to the statutory minimum notice period as opposed to common law notice (which often far exceeds the statutory minimum).

The Facts

This case concerned the employment of Ms. Verigen, a 58-year-old employee working within the travel industry. The travel industry was of course severely and detrimentally impacted by the COVID-19 pandemic. After a series of layoffs, Ms. Verigen’s employment was terminated as a consequence of the pandemic. Ms. Verigen then sought damages against her employer, for an amount reflecting a notice period of nine months.

Her employer argued in response that she had agreed to limit her claim to the statutory minimum notice period. They said her original offer of employment was made contingent on her accepting the terms of the employee handbook, which included a termination clause limiting her claim to the statutory minimum.

However, of critical importance to the ultimate decision was the fact the original offer of employment, made by email and accompanied by many other documents, did not actually provide the employee handbook. The employee handbook was not sent to Ms. Verigen. Ms. Verigen was only sent the employee handbook three months after she began working for the employer. When she finally received the document, she did sign it.

Was the Employee Handbook Enforceable?

Ms. Verigen, having finally signed the employee handbook three months following the start of her employment, appears to have agreed to the termination provision contained therein, limiting her entitlements upon termination to the statutory minimum. The key question, then, is whether or not the handbook is enforceable.

Ms. Verigen, in arguing that the handbook was not enforceable, stated the handbook amended her original employment contract without providing fresh consideration. Recall that she only signed the handbook three months after beginning to work for the employer. In considering this argument, the British Columbia Supreme Court referred to an earlier decision, Matijczak v. Homewood Health Inc., wherein Justice Verhoeven said:

“While the law relating to the requirement for consideration in order to support amendments to an agreement may be in a state of flux, it appears that the law in BC continues to require consideration where an employer seeks to impose an amended employment agreement with significant modifications, detrimental to the employee …” (emphasis added)

It is noteworthy that this also appears to be the approach taken by Ontario courts, as mentioned in the Ontario Court of Appeal decision Braiden v. La-Z-Boy Canada Limited.

In applying this reasoning, the British Columbia Supreme Court held that the employee handbook, as signed by Ms. Verigen after already commencing employment, cannot be binding on her insofar as it limits her claim on termination to the statutory minimum because no fresh consideration was provided in support of it.

What employers can take away from this decision is that if they wish to amend or add to an employment agreement, particularly where the amendment is something that is likely detrimental to the employee, they must ensure that proper and sufficient consideration is given to that new agreement, otherwise, they run the risk of it being unenforceable for lack of consideration.

Having found that Ms. Verigen was entitled to common law notice as opposed to the statutory minimum, the Court awarded her five months’ notice.

Ontario Government Introduces Digital Rights for Employees

by Stacey R. Ball| May 24, 2022August 14, 2023 | General

Over the last two years, the global COVID-19 pandemic has facilitated significant changes to the way Canadians work. Workplaces have transformed from in-person settings to digital, remote settings at an unprecedented rate. As the way we work changes, so too must the law. This is a daunting task, as changes to workplaces are advancing at lightning speeds.

The Government of Ontario has tried to keep up. In November 2021, the Ontario legislature passed Bill 27, the Working for Workers Act, 2021, which requires employers to introduce policies regarding the “right to disconnect”. This was vital, as employees working remotely due to COVID-19 could otherwise find themselves expected to reply to emails or answer phone calls at all times of the day, even late into the evening. Thankfully, the Ontario government did not stop there. On February 28, 2022, the Ontario government introduced further legislation: Bill 88, the Working for Workers Act, 2022.

Further Digital Rights for Employees: Policies on Electronic Monitoring

Bill 88, like Bill 27 before it, is informed by the current COVID-19 era workplace. If passed, Bill 88 would amend the Employment Standards Act, 2000 to introduce new employee and human rights and protections. Specifically, Bill 88 would require employers with more than 25 employees to introduce written policies on electronic monitoring.

These policies are required to contain the following information:

Whether the employer electronically monitors employees and if so,
1. a description of how and in what circumstances the employer may electronically monitor employees, and
2. 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.

Bill 88 does not define “electronic monitoring”, so it may have a broad scope. For example, “electronic monitoring” might include video surveillance (possibly via laptop webcam), GPS tracking in cellphones or company vehicles, and tracking programs on computers, which could potentially have the ability to track the time employees spend on certain websites or software. Such tracking software could be so specific as to track every key employee types on their keyboard. With workplaces moving into the digital world, these forms of electronic monitoring pose a serious risk to employees of being micromanaged. Further, as many employees work from home, their privacy is also an issue. If passed, Bill 88 and its requirement of electronic monitoring policies could go a long way in protecting employees working remotely through the digital world.

Digital Platform Workers’ Rights Act, 2022

Apart from introducing electronic monitoring policies in the workplace, Bill 88 would also enact the Digital Platform Workers’ Rights Act, 2022. This Act, among other things, would establish minimum rights and protections for workers performing “digital platform work”. “Digital platform work” is defined to include “rideshare, delivery, courier or other prescribed services by workers who are offered work assignments by an operator through the use of a digital platform.” This would likely capture those working within the “gig economy” who make a living using apps such as UBER. The rights and protections being afforded to such workers under this new Act include:

The right to information;
The right to minimum wage (currently set at $15 under the Employment Standards Act, 2000);
The right to a recurring pay period and pay day;
The right to amounts earned by the worker, including tips;
The right to notice of removal (i.e., from the digital platform);
The right to have disputes between the worker and the digital platform’s operator resolved in the Province of Ontario; and
The right to be free from reprisal.

The Act, however, avoids classifying such workers as “employees”. These rights apply to such workers regardless of their employment status. Nevertheless, these should be a welcome sight to any individual currently earning their income in the digital gig economy.

A Welcome Sight

The Ontario Government has shown their willingness, through the enactment of Bill 27 and the introduction of Bill 88, to adapt to the ever-changing workplace reality necessitated by the global COVID-19 pandemic. Of course, many employees in 2022 have returned to in-person workplace settings, but that does not mean these new protections will go to waste. It remains to be seen how much of our work will take place in person, online, or through a mixture of both. Regardless of whether your workplace is physical or digital, more protections for workers are always a welcome sight.

Duty of Fair Representation Where Union Does Not Challenge Vaccine Mandate

by Stacey R. Ball| May 23, 2022August 14, 2023 | General

In an earlier blog post this year, we looked at a case suggesting that unions that are unsuccessful in challenging workplace mandatory vaccine mandates are not in breach of their duty of fair representation under the Ontario Labour Relations Act, 1995. The “duty of fair representation” says that a union shall not act in a manner that is arbitrary, discriminatory or in bad faith in representing employees or depending contractors.

An even more recent decision, this time at the Canada Industrial Relations Board, seems to support that earlier finding. In Watson v Canadian Union of Public Employees, a union was not only unsuccessful in challenging a mandatory vaccine policy, they actually refused to advance a challenge altogether. Even in this context, unions may not be in breach of their duty of fair representation, which reveals just how difficult it will be to make out such a case.

Background and Facts

The complainant, in this case, was a flight attendant with Air Canada. On August 13, 2021, the Government of Canada announced that it would require all employees in the federally regulated air transportation sector, such as Air Canada, to be vaccinated by no later than the end of October, 2021. That same day, the Union emailed their members to voice their support for the vaccine mandate, arguing that vaccination was a “proven strategy to mitigate the threat of COVID-19.” Already, we see that the Union here was supportive of the new policy. By the end of August, Air Canada had implemented a mandatory vaccine policy requiring vaccination by October 31^st, failing which employees faced discipline up to termination.

Despite their support for vaccinations, the Union also communicated that they would challenge any discipline, including termination, which resulted from the new workplace vaccination policy. Nevertheless, they remained of the view that “vaccines were critical to providing a safe work environment for employees and ensuring a recovery of the airline industry.”

Should the Union Challenge the Policy?

The Union received two separate legal opinions on the viability of the vaccine policy. They concluded that the Air Canada policy would likely withstand a challenge through grievance arbitration. Furthermore, it was decided that a challenge pursuant to the Canadian Charter of Rights and Freedoms would also be unsuccessful. The policy would likely be deemed reasonable at arbitration (and this is not surprising, given that many similar policies have already been deemed reasonable, for instance, as discussed in this and this earlier blog post).

Based on this, the Union told its members that it would be focusing its efforts on the implementation and administration of the vaccine policy, rather than on the policy itself, and supporting members experiencing discipline pursuant to the policy.

The Duty of Fair Representation Complaint – What Was the Result?

The Canada Industrial Relations Board had to decide whether the union acted in a manner that was arbitrary, discriminatory or in bad faith in making its decision not to pursue a grievance challenging the employer’s mandatory vaccination policy. A summary of what this means was helpfully provided in a separate Board decision:

A union must not act arbitrarily. Arbitrariness refers to actions of the union that have no objective or reasonable explanation, that put blind trust in the employer’s arguments or that fail to determine whether the issues raised by its members have a factual or legal basis.
A union must not discriminate on the basis of age, race, religion, sex or medical condition. Each member must receive individual treatment and only relevant and lawful matters must influence whether or not a grievance is referred to arbitration.
A union must not act in bad faith; that is, with improper purpose.

The Complainant’s main argument here was that the decision not to pursue a policy grievance was arbitrary. In the Complainant’s view, the Union did not “seriously or sufficiently consider the prejudicial impact of the policy on a number of bargaining unit members who will not comply with the policy due to medical or other personal reasons.” As union members, they have no individual right to seek remedies in the courts – the union’s efforts are their only hope.

In answering these questions, the Board began by acknowledging that an employee represented by a union does not have a right to pursue a grievance to arbitration – this is the role of the union as the exclusive bargaining agent. The union’s duty of fair representation does not impose on them an obligation to take all grievances to arbitration. The union has no obligation to advance grievances that, in its best judgment, are not likely to succeed.

The Board did not agree that the Union’s actions were arbitrary. They note that the Union was well aware of the objection of certain employees to the vaccination policy. As events unfolded, the Union regularly communicated with their members and kept them up to date on any and all developments. The Union quickly obtained legal opinions on the new policy and shared the results of those opinions with their members. It was decided that the likelihood of success in challenging the policy was very low. In the Board’s view, “the union turned its mind to the issues at play and was fully engaged with its membership.” The Union had not been acting arbitrarily.

The Board noted that this case is distinguishable from other cases where mandatory vaccine policies were held unreasonable (such as the Electrical Safety Authority decision, as discussed in this blog post). The employer in Electrical Safety Authority was not under a government order to establish a vaccination policy. Here, Air Canada implemented a vaccine policy in compliance with an order issued by the federal government directing airlines to adopt vaccination policies.

Given all of the above, the Board was not persuaded that the Union had acted in a manner that was arbitrary, discriminatory or in bad faith. As such, the duty of fair representation complaint was dismissed.

Secretly Recording Co-Workers: Just Cause for Dismissal?

In a recent decision of the British Columbia Supreme Court, Justice Branch was tasked with determining whether or not “the surreptitious recording of one’s fellow employees” could serve as a proper basis for dismissal.

The Parties

This case concerned the termination of Mr. Shalagin from his position as a senior financial analyst with the defendant employer, Mercer Celgar Limited Partnership (“Mercer”), a pulp mill. He had been working with the company since 2010. As senior financial analyst, Mr. Shalagin had access to sensitive financial and planning information.

Mr. Shalagin was not subject to any employment contract while working with Mercer, but was bound by the company’s Code of Business Conducts and Ethics (the “Code”) and a confidentiality policy. Under the Code, Mr. Shalagin was required to “conduct himself with honesty and integrity and to adhere to the highest ethical standards in carrying out his duties” on behalf of Mercer. The Policy further required him to be honest and ethical in dealing with other employees and third parties such as customers.

Mr. Shalagin had many issues with his employer including perceived discrimination, but above them all was his disagreement with the company’s view of his bonus determination formula and entitlement. He threatened Mercer with litigation over that bonus, and they decided to terminate him without cause in response.

Following his termination, Mr. Shalagin commenced a number of proceedings against his employer including an Employment Standards Act complaint, a human rights complaint and a wrongful dismissal complaint.

The “Surreptitious” Recordings

During Mr. Shalagin’s human rights proceeding, it was revealed that Mr. Shalagin had taken a number of surreptitious recordings while with Mercer. It was revealed he had made recordings during the following meetings:

several one-on-one training sessions from 2010 to 2014;
over 100 “Toolbox Talk” and safety meetings, at which he often presented personally (and where the meetings involved 20 to 30 people); and
at least 30 one-on-one meetings with supervisors and human resources personnel about compensation and recruitment.

It is clear that these recordings happened on many, many occasions. Notably, Mr. Shalagin never had permission to make these recordings. He admitted to knowing that the participants would have felt uncomfortable had they known they were being recorded. Some of these recorded conversations included confidential company information. Some recordings picked up sensitive personal family details of other employees.

However, there was no evidence to suggest that these recordings were ever shared with anyone other than the B.C. Human Rights Tribunal and Mercer. There was no evidence that Mr. Shalagin sought to obtain a financial benefit from the recordings.

Based on the new evidence that arose as part of the human rights proceeding, Mercer changed its position: instead of firing Mr. Shalagin without cause, they would now rely on just cause for his termination.

Was There Just Cause?

Justice Branch notes, firstly, that misconduct discovered post-termination can indeed constitute just cause. To rely on that post-termination conduct, the Court must determine whether the alleged misconduct “was something a reasonable employer could not be expected to overlook, having regard to the nature and circumstances of his employment.”

The key issue for Justice Branch, therefore, was whether or not Mr. Shalagin’s decision to surreptitiously record his co-workers amounted to just cause. Did the recordings “go to the root” of Mr. Shalagin’s contract, and “fundamentally struck” at his employment relationship? Although he was legally permitted to record the conversations, this is not the real issue: what matters is not the legality of the recordings, but whether his actions in making the recordings “fundamentally ruptured the relationship, such that the mutual trust between the parties is broken.”

Earlier jurisprudence has shown that surreptitious or secretive recording of a conversation in the workplace context can cause “material damage to the relationship of trust between employee and employer.” On this basis, Justice Branch held that the secret recordings indeed were a just cause for Mr. Shalagin’s termination. Justice Branch commented:

“I find that Mercer has established just cause: […]

b) Although the initial recordings said to be for the plaintiff’s own language training purposes may not, on their own, have supported just cause, they demonstrate how the plaintiff’s sensitivities towards his colleagues’ privacy began to loosen. He knew that his fellow employees would be uncomfortable with even these early recordings, yet he continued to make them. I find that he knew it was wrong, if not legally, at least ethically. … […]
d) With his sensitivities lowered, he carried on to record ever more sensitive conversations, including conversations that involved personal information on other employees. The conversations included personal details about his co-workers that had nothing to do with the workplace. […]

h) I accept that the plaintiff was not acting with malice in making the recordings and that this is a mitigating factor. However, the fact that his stated bases for the recordings were all unnecessary or ill-founded, and several were designed to benefit him alone, weighs on the other side of the ledger. Likewise, the fact that the recordings captured personal information from his subordinates and colleagues and, thus, could not have supported his alleged purposes in any case, also weighs against his position.
i) I accept that the fact that the plaintiff did not publish the recordings and did not seek to make use of them for his own benefit outside of the ongoing legal proceedings is a mitigating factor as well. However, on the other side of the ledger, the sheer volume of recordings, and the length over which they occurred, generally offsets this factor.
j) I accept the evidence provided by Mr. East and Ms. Ketchuk that they felt violated by the recordings. I also accept that this reaction was reasonable in the circumstances. Ms. Ketchuk clearly treated the plaintiff as a protegée and felt that the trust she invested in him had been violated—a trust that included telling him about personal family matters, which were recorded.
k) Looking at the effect on employment relationships more broadly, accepting the plaintiff’s argument may encourage other employees who feel mistreated at work to routinely start secretly recording co-workers. This would not be a positive development from a policy perspective, particularly given the growing recognition that the courts have given to the importance of privacy concerns.[…]”

Mr. Shalagin’s claim for wrongful dismissal damages was therefore dismissed, as the employer had successfully established after-acquired cause for his termination.

This case should be a lesson to employees that although secretly recording conversations with your employer or fellow employees may be legal, it will not prevent your employer from termination you for cause.

Unsigned Employment Contract Upheld by B.C. Court

by Stacey R. Ball| May 21, 2022August 14, 2023 | Employment Contracts

Many employees might believe that because they never physically signed their written employment agreement, it does not apply to them. A recent decision of the Supreme Court of British Columbia, however, might suggest otherwise. Here, a termination provision found within an unsigned employment contract was upheld.

The Facts and Impugned Termination Provision

The employee in this case had worked for the defendant employer for approximately fourteen months before being terminated without cause. The employee was 34 years old when his employment was terminated. When he was terminated, the employee was given two weeks’ pay in lieu of notice. This amount sufficiently provided the employee with their statutory minimum entitlements under the Employment Standards Act. However, the employee felt he was entitled to much more and claimed nine months’ reasonable notice or pay in lieu of notice.

According to the employer, the statutory minimum of two weeks’ pay is all the employee was entitled to under his employment contract. That employment contract contained the following termination provision, the wording of which was not in dispute:

c) Termination Without Cause. The Company may terminate your employment at any time in its sole discretion, for any reason, without cause or serious reason, upon providing to you:
that minimum amount of advance notice (or pay in lieu) to which you are entitled on termination of employment under the applicable employment or labour standards statute or law in the province where you are assigned to work for the Company at the time your employment is terminated (the “Act”), and
any other minimum amounts or entitlements to which you are entitled on termination of employment under the Act, including: (A) statutory severance pay; and/or (B) for that minimum period required by the Act, continuation of any benefits in which you are enrolled as of the date you receive notice of termination.

In the employee’s opinion, this termination clause was illegal and unenforceable because, among other things, he never signed it and never agreed to its terms. Of course, the employer’s position was that the termination clause was enforceable and limited the employee to the statutory minimum. As a result, the key issue in this case concerned whether or not the contract’s termination provision was enforceable notwithstanding that the employee never signed it. If enforceable, the termination provision would indeed operate to limit the employee’s entitlements to the statutory minimum.

The Enforceability of the Employment Contract

Even if the employee had not signed the agreement, the employer believed the trial judge could infer from all the surrounding circumstances that the terms of the contract were set out and were accepted by the employee and thus binding on him. Notably, the employee was sent a variety of different employment contracts that had been revised per his input. However, despite his many requests to the contrary, the termination provision was never changed. His input as it pertained to the termination provision was never adopted by the employer.

Given the above, the trial judge determined the employee was aware that the termination clause was non-negotiable. Despite his many attempts to negotiate the term, it remained unchanged. The employee had been successful in negotiating other terms resulting in significant improvements in his favour, but never the termination provision. Ultimately, the trial judge determined as follows:

“[67] When viewing the evidence as a whole, I am satisfied that the October 30, 2019 document, even if unsigned, represents the employment contract negotiated between the parties. As such, I find the plaintiff knew the termination clause was part of the contract and that he was bound by it. For reasons already stated, I agree the plaintiff’s credibility is diminished on that aspect and I specifically find I cannot rely on his statement that he never agreed to the termination clause.” (emphasis added)

In the end, the trial judge held that the termination clause was clearly part of the employment contract and that it was clear and therefore enforceable. The employee was entitled to no more than the statutory minimum as stated in the employment contract.