Further to my last blog, the Waxdale case remains valid precedent, indicating that an entire termination clause in an employment contract may be struck in a wrongful dismissal case if the “for cause” termination clause is too broad and overreaching.
The significance of just cause terminations is that the employer is not necessarily required to pay notice or severance to the employee. Therefore, it is a high threshold to reach and be upheld. Further, there must be willful misconduct, an even higher threshold, to deny an employee’s ESA entitlements.
As in most situations, case decisions on wrongful dismissal are fact and context specific, considering factors including the culture of the workplace, power imbalance among the parties, relevant policies and training, the severity of the action or actions, employee accountability, investigation process and outcomes, and reasonable alternatives to termination as applicable.
Just cause for dismissal is supportable where the employee’s behaviour violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.
A single act of harassment can justify cause. In Render v ThyssenKrupp Elevator, the respondent had no intent to engage in sexual misconduct, but also did not appear to understand or acknowledge the impact of his behaviour. The court agreed with the employer’s position that the employee had no appreciation of his actions and could not be confident it wouldn’t be repeated. Termination for cause was upheld. Factors including workplace culture, imbalance of power and circumstances of the incident also played a role in the decision.
In Hucsko v. A.O. Smith Enterprises Ltd., the Ontario Court of Appeals upheld that a series of acts of verbal harassment, along with other factors including imbalance of power and lack of acknowledgement, constituted grounds for just cause termination.
However, in McKinley v BC Tel, where an employee withheld information from his employer about his medical condition and related treatments, the Supreme Court held that the punishment or sanction must be proportional to the severity of misconduct, and in that case, while the misconduct was intentional and harmful to the employer, for cause termination was too severe of a response. The court found that the employee’s dishonesty was not in a manner that undermined, or was incompatible with, his employment relationship.
COVID-related cases
Johnson Controls v Teamsters illustrates that context matters, where a just cause termination of a long service hospital employee for violating COVID screening protocols was supported. The employee came to work with upper respiratory symptoms over several days but denied it in screening, and had COVID. The intentional dishonesty, particularly in the health care setting, was sufficient to uphold the cause termination. The employee’s prior record was also a factor.
However, in Tenneco Canada Inc. v United Steelworkers, an employee had a pre-existing respiratory condition, denied symptoms in workplace screening, and was terminated for violating the screening protocol. The arbitrator concluded that although the employee’s conduct was very serious, it did not warrant the penalty of discharge. Mitigating factors included the employee’s acknowledgement and likelihood not to repeat the behaviour. The employee was reinstated with no backpay.
Takeaways:
– Employment agreements should be reviewed by an employment law professional and updated if needed to ensure the termination clause is enforceable.
– Note that employment agreements limiting the rights of existing employees cannot be amended without proper consideration (something of value such as a raise, promotion or extra vacation etc.) and acceptance (signature), so timing and approach to updating existing employment contracts is critical to the receptivity of staff to the request.
– Employers have a statutory duty to ensure a safe workplace, free from bullying, harassment, violence and discrimination. Make sure relevant policies are up to date and clear, including procedures for raising concerns and investigations, consistently reinforced, and include training.
– Employers also have a duty to investigate – whether internally or by a third party – claims of harassment or discrimination . If there is a finding of that or other misconduct, several factors should come into play to determine appropriate consequences. Termination may be appropriate, noting that just cause is a high but not insurmountable threshold. There may be alternatives to termination in some circumstances.
– In determining whether there is a reasonable response to misconduct besides termination, first there must be confidence the employment relationship can continue. Consider all possible disciplinary actions and their proportionality in the context of the severity of the behaviour(s), policy language, employee’s service and record, outcome of investigation, impact of the behaviour and the employee’s response (i.e., is there is a sincere apology from the employee, recognition that the conduct was wrong, and assurance it won’t repeat).
– Reasonable alternatives to termination may include leave, suspension, training, or different roles or reporting structures.
Note: My blog contains a general overview of legal cases, updates and perspectives from a variety of sources, and is not intended to be relied upon or taken as legal advice or opinion. Laws may change and should be interpreted in the context of their circumstances at the time. It is strongly encouraged to consult with an employment law professional for specific advice in any particular situation.
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Current status of ON Employment Standards related to COVID
The following are some important updates to COVID-related ESA rules, as the virus and related policies continue to evolve this year.
Paid Infectious Disease Emergency Leave extended to March 31, 2023
Paid infectious disease emergency leave (“IDEL”) previously set to end July 31, 2022, was extended again to March 31, 2023. The Employment Standards Act, 2000 (ESA) was initially amended in April 2021 to require employers to provide eligible employees with up to 3 days of paid infectious disease emergency leave for certain reasons related to COVID-19, such as when an employee is under medical investigation, supervision or treatment, or is required to provide care for a specified family member. Additional paid leave is not required if the employee’s absence was already covered by the company’s paid leave policy.
Eligible employers can apply to the Workplace Safety and Insurance Board to be reimbursed for these payments of up to $200 per day for 3 days for each employee who takes paid IDEL. Individual or grouped claims must be made within 120 days of the date the employer paid the employee, or by July 29, 2023, whichever is earlier.
Unpaid IDEL continues
Unpaid IDEL will continue to be available as an ESA leave for as long as COVID-19 is designated as an “infectious disease”. Employees will continue to be able to access Unpaid IDEL where the employee will not be performing work for one or more of the following reasons in relation to COVID-19:
- The employee is under individual medical investigation, supervision or treatment.
- The employee is subject to an order of a medical officer of health or a court under the Health Protection and Promotion Act.
- The employee is in quarantine or isolation or subject to a control measure, including self-isolation, that is undertaken because of information or directions issued by a public health official, qualified health practitioner, Telehealth Ontario, the government of Ontario or Canada, a municipal council or a board of health.
- The employer directs the employee to stay at home because of concerns that the employee might expose other individuals in the workplace to the designated infectious disease.
- The employee is providing care to any of the specified individuals listed above, including because of closures of schools and daycares.
- The employee is directly affected by travel restrictions preventing the employee from returning to Ontario.
- Any prescribed reason.
Employers should continue to assess all requests for unpaid IDEL on a case-by-case basis, and can ask for “evidence reasonable in the circumstances,” “at a time reasonable in the circumstances,” to verify the unpaid IDEL, but are prohibited from requiring employees to obtain medical certificates to justify the leave.
Temporary ESA rules no longer in effect
“Deemed IDEL”, the temporary relief measures from the termination and severance provisions of the ESA, ended effective July 30th. Implications are as follows:
- The termination and severance rules under the ESA related to layoffs will again apply where an employee’s hours of work have been reduced or eliminated, or an employee’s wages have been reduced, for reasons related to COVID-19.
- Certain actions of an employer made in response to COVID-19—a temporary reduction or elimination of an employee’s hours of work, or a temporary reduction in an employee’s wages—will no longer be deemed not to be a constructive dismissal.
Employers should carefully consider possible impacts of these changes for any COVID-related staffing decisions going forward, and keep aware of any other legislative amendments resulting from changes in public health.