Howard Levitt: Lessons from major cases that defined workplace conduct in 2021

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It would not be late December without my roundup of the year’s most important employment law developments. Here are the major cases that defined workplace conduct in 2021.

1. Compulsory vaccinations

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Despite the plethora of lawsuits against employers for terminating for cause or placing employees on unpaid leaves of absence for failing to vaccinate, the courts have not yet weighed in.

But we have had several arbitration decisions and, although they are not unanimous, they have generally supported employer rights, as they have throughout the pandemic whenever health and safety is at issue.

With the federal government announcing earlier this month its intention to require mandatory vaccinations in all federally regulated workplaces, the support of chief medical officers throughout the country and the legislative imperative to protect workplace health and safety, there appears little doubt that the courts will support such mandatory policies. Employees suing for such discharge should not invest in such lawsuits until the courts have made their rulings, likely at the Court of Appeal level.

Another related issue is lawsuits against employers for negligence as result of employees or others contracting COVID-19 in their workplace and either becoming ill, dying and/or passing it on to others.

Such lawsuits will be successful if the employer cannot establish that it took all reasonable precautions. Since mandatory vaccinations is the gold standard of care according to science and chief medical officers, the safest approach for employers to avoid such prospective liability is a mandatory vaccination policy.

2. Rahman v Cannon Design Architecture, Campbell-Givons v Humber River Hospital and many more

There have been a series of decisions in Ontario invalidating employment contracts based on any component of them providing less protection than the equivalent provision in the Employment Standards Act.

They flowed from the Waksdale decision of the Ontario Court of Appeal of 2020, a ruling that providing no severance in the event of “cause” invalidated the entire termination provision.

The decision in the case of Farah Rahman, who agreed to a contract paying her $185,000 per year, plus benefits and bonus, the courts decided differently because the plaintiff was sophisticated and obtained legal advice, but other cases since were critical of it. It is unlikely the ruling on Rahman will be followed. There are few Ontario employment contracts entered into before 2020 that are enforceable today.

3. McCallum v Rand, Manitoba Court of Appeal

There is no duty to investigate before terminating for cause. I always recommend that companies investigate to ensure they do not make an error, to learn of flaws in your system or of the culpability of others and to pin employees down to a story before they “lawyer up.” But such investigations are almost always best conducted quickly, within a day or two, by trained in-house human resources staff. If the investigation involves someone such as the chief executive officer, then hire an outside investigator, but use a retired judge who has far more credibility than, say, a lawyer, and is unlikely to be seen as simply a “hired gun” providing the advice the company pays for.

4. Callow v Zollinger, Supreme Court of Canada

Even if a contract provides an unlimited right, employers must still exercise it in good faith and cannot mislead. If you have decided to dismiss an employee, you cannot lead her to believe her position is secure and even silence can be viewed as a breach. If you know that an employee is under a false impression, you have a duty to correct it.

5. Wastech v Greater Vancouver Sewage and Drainage, Supreme Court of Canada

Employers must use their discretion, even if the contract provides that it is absolute, in good faith and is used it in ways which advance the objectives of the contract. This will apply, for example, to bonus awards which are “discretionary.”

6. Perretta v Rand Technology, Ontario Superior Court

If you have a termination provision in an employment contract but refuse to fully pay it out unless the employee signs a release, you can no longer rely upon that termination provision and the court will award full wrongful dismissal damages.

7. Caplan v Atlas, Ontario Superior Court

In this ruling, the court created a tort of internet harassment and awarded an injunction against further posts and transferred ownership of the posts to the party who was harassed so that they could have the posts removed.

8. Coutinho v Ocular Health, Taylor v Hanley and other cases, Ontario Superior Court

This case discussed whether a layoff is a wrongful dismissal or whether the Infectious Disease Emergency Leave (IDEL) legislation permits it. My best view is that a layoff remains a constructive dismissal, but if the employee acquiesces to it without protest and some months go by, then it is not. If it was otherwise, millions of Canadians would have viable legal actions.

9. Northern Regional Health Authority v Horrocks, Supreme Court of Canada

Unionized employees cannot proceed to human rights tribunals (or to any other statutory tribunal) for redress, just as they cannot sue civilly, since the arbitration regime provides exclusive redress, unless the particular human rights legislation permits both.

10. Hawkes v Max Aicher, Ontario Superior Court

If the worldwide payroll, not just the Ontario payroll, of a company exceeds $2.5 million then severance pay applies under the Ontario Employment Standards Act.

11. O’Reilly v ClearMRI Solutions, Ontario Court of Appeal

Even if a second company is the parent or related to the employer, it will not be liable as a common employer unless the intention was for that company to create an employment relationship with that employee. Such an intention is not subjective but can be ascertained from an employment contract or whether that company has effective control over the employee.

12. Eynon v Simplicity Air, Ontario Court of Appeal

If a manager is left in charge of a portion of the workplace, the employer will generally be responsible for their conduct even to the extent of being liable for punitive damages.

I hope that all readers have a wonderful holiday season and the best New Year’s celebration that our government and conditions permit. Wishing everyone a wonderful (and better) 2022!

Got a question about employment law during COVID-19? Write to me at levitt@levittllp.com.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers. He practises employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada.

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