A busy year in Ontario employment and labour law

Ontario’s employment and labour law landscape continued to evolve in 2021 despite the pandemic, with courts and arbitrators making some notable decisions — some related to COVID-19 while others addressed separate issues — leaving employers with a lot to stay on top of.

Key decisions of the Ontario Court of Appeal

In McGuinty v. 1845035 Ontario Inc., 2020 ONCA 816, the province’s Court of Appeal (OCA) upheld one of the highest damage awards ever granted to an employee in Canada for constructive dismissal — $1,270,000, the employee’s expected earnings for the balance of the term of his fixed-term contract. In concluding that the employee had not condoned his constructive dismissal, the OCA considered his unique personal circumstances and noted that he did not return to work due to depression and anxiety caused by the employer’s conduct in constructively dismissing him.

In Eynon v. Simplicity Air Ltd., 2021 ONCA 409, the OCA refused to overturn a jury’s $150,000 punitive damage award for an employee for injuries suffered in a workplace accident. A supervisor’s conduct in the hour between the accident and the employee’s arrival at the hospital occurred in the course of the supervisor’s employment, was considered the employer’s conduct, and occurred within “a culture within the company whereby employees failed to place adequate importance on best safety practices.” 

It wasn’t all bad news for employers, as the OCA confirmed in Hucsko v. A.O. Smith Enterprises Limited, 2021 ONCA 728, that if a properly conducted investigation finds that an employee engaged in sexual harassment in the workplace, the employer may take firm action ranging in severity, including termination of employment for cause.

Ontario’s lower courts

In Caplan v. Atas, 2021 ONSC 670, the Ontario Superior Court of Justice recognized a new common law tort of internet harassment, which may provide recourse and remedies for employers that are harassed, bullied or stalked online.

In Nahum v. Honeycomb Hospitality Inc., 2021 ONSC 1455 — an appeal was later dismissed — the court determined that if an employee is pregnant at the date of dismissal, her pregnancy is a factor that a court may consider when determining her reasonable notice period, provided that the pregnancy is reasonably likely to negatively impact the employee’s ability to find alternative employment.

Ontario Regulation 228/20 under the province’s Employment Standards Act, 2000 (ESA) in most cases eliminated temporary layoffs and the risk of a constructive dismissal claim under the ESA for employees who had hours reduced or eliminated due to COVID-19 for the defined “COVID-19 period.” The end date of the COVID-19 period has been extended several times — most recently to July 30, 2022.

In Coutinho v. Ocular Health Centre Ltd., 2021 ONSC 3076, the court decided that the IDEL Regulation did not remove an employee’s common law right to claim constructive dismissal from a layoff during the COVID-19 pandemic. Six weeks later, the court reached the opposite conclusion in Taylor v. Hanley Hospitality Inc., 2021 ONSC 3135, leaving the law in an ambiguous state. Both decisions have been appealed.

Hawkes v. Max Aicher (North America) Limited, 2021 ONSC 4290, is a decision of pertaining to s. 64 of the ESA, which requires an employer that terminates an employee with at least five years of service to pay minimum ESA severance pay if the employer has a payroll of CDN$2.5 million or more. The decision establishes that employers must consider the size of their global payroll — if an employer’s payroll in Ontario is less than $2.5 million but its global payroll more, the employer will be liable for severance pay under the ESA.

In Morningstar v. WSIAT, 2021 ONSC 5576, the court quashed the portion of a 2020 Workplace Safety and Insurance Appeals Tribunal ruling that if an employee sustains harm due to harassment and bullying in the workplace, they can make a claim for constructive dismissal only through the Workplace Safety and Insurance Act (WSIA), which entitles the claimant to benefits under the insurance plan for chronic and traumatic stress. Morningstar provides that if an employee sustains such harm, they may also bring a civil claim of constructive dismissal against the employer.

Ontario courts debated COVID-19 layoffs and constructive dismissal in 2021.

COVID-19 screening

In July 2021, the arbitrator in United Food & Commercial Workers Canada, Locals 175 & 633 v. AvisCar Inc. (R.S.A., S.A. Shuttler) Rental Car Company dismissed a grievance on behalf of a former employee with 15 years of service and a clean disciplinary record. The employee was dismissed for violating Avis’ Health and Safety protocols when he attended work with symptoms of COVID-19 and while awaiting the results of a COVID-19 test. The test subsequently came back positive and the employee infected three of his co-workers, who then infected their families.

The arbitrator refused to mitigate the penalty because evidence was presented that the employee lacked credibility, had not demonstrated real remorse, and did not accept responsibility for his actions. Avis had lost all trust in the employee and there could not be a viable employment relationship going forward.

Challenges to vaccination policies

In late 2021, several employee groups failed to obtain injunctions against the enforcement of mandatory COVID-19 vaccination policies — Blake v. University Health Network, 2021 ONSC 7139; Amalgamated Transit Union, Local 113 v. Toronto Transit Commission and National Organized Workers Union v. Sinai Health System, 2021 ONSC 7658;  Canada Post Corporation and Canadian Union of Postal Workers — confirming that unionized employees will have difficulty restraining employers from suspending or terminating unvaccinated employees before the union challenges the employer’s policy with a grievance.

Three notable Ontario arbitration decisions addressed grievances challenging mandatory COVID-19 vaccination policies (United Food and Commercial Workers Union, Canada Local 333 v. Paragon Protection Ltd., Bunge Hamilton Canada, Hamilton, Ontario v. United Food and Commercial Workers Canada, Local 175, Teamster’s Local Union 847 v. Maple Leaf Sports and Entertainment).

They indicate that arbitrators generally consider the implementation of such policies reasonable provided they comply with Ontario’s Human Rights Code, viewing the minimal intrusion on privacy rights justified by the employer’s obligation under the Occupational Health and Safety Act to take every reasonable precaution to protect the health and safety of its employees and the need to ensure public health and safety. One decision (Electrical Safety Authority and Power Workers’ Union) struck down such a policy as unreasonable, emphasizing the importance of conducting a contextual analysis and opening the possibility that some mandatory vaccination policies may be struck down.

An employment lawyer compares policies on drug and alcohol testing, COVID-19 testing, and flu vaccination.

Rhonda B. Levy is a knowledge management counsel for Littler LLP in Toronto. She can be reached at (647) 256-4545 or [email protected]. Barry Kuretzky is a partner with Littler LLP in Toronto. He can be reached at (647) 256-4503 or [email protected]. George Vassos is a partner with Littler LLP in Toronto. He can be reached at (647) 256-4504 or [email protected].