LawsonInsight
LawsonInsight
Top Employment Issues in 2021
On Episode 16:Top Employment Issues in 2021 – Mark Fancourt-Smith and Alix Stoicheff speak with Nicole Skuggedal and Jim Boyle on some of the most interesting labour, employment and human rights cases in 2021 about masking policies, remote work arrangements and compensation awards.
Mark Fancourt-Smith 00:07
Welcome to LawsonInsight. I'm Mark Fancourt-Smith, a partner in Lawson Lundell’s Vancouver office,
Alix Stoicheff 00:12
and I'm Alixandra Stoicheff, an associate in the firm's Calgary office. On this episode, we will be speaking with Nicole Skuggedal and Jim Boyle. Nicole is a partner in the Vancouver office who practices in the areas of labor, employment and human rights law as well as privacy law.
Mark Fancourt-Smith 00:26
And Jim is an associate and Lawson Lundell is Vancouver office and is also a member of the firm's labor employment and human rights practice group. Jim and Nicole, thanks for coming on the podcast today.
Jim Boyle 00:35
Thanks for having us.
Nicole Skuggedal 00:37
Glad to be here.
Mark Fancourt-Smith 00:38
We wanted to talk with you about recent developments in employment and human rights law and thought we would focus our conversation today on two issues that you'd recently covered in a recent webinar that your group put on. The first is a discussion about some developments at the Human Rights Tribunal. And then we'll move across the country to talk a bit about the decision from the Supreme Court of Canada that's causing Employment Lawyers and particularly those in Ontario, to really reconsider how employment contracts are drafted. So starting at the BC Human Rights Tribunal as likely not that surprising a number of complaints being brought before at recently relate to masking and specifically masking policies both for employees and for patrons of businesses. Essentially, these cases involve individuals who filed complaints saying that a requirement to wear a mask violates or infringes upon a protected human right. So Nicole, what can you tell us about the approach the tribunal seems to be taking when dealing with these complaints?
Nicole Skuggedal 01:33
I would say Mark; they're taking a very practical approach that is consistent with the existing jurisprudence of the tribunal. So they've issued two screening decisions, and screening decisions are preliminary inquiries by the tribunal, where they basically put out for the public their findings and likely why they are doing this is in response to the significant number of masking complaints so that people know the views of the tribunal. The first case involves a grocery store, who in September of 2020, had a mandatory masking policy. Customer came to the store and was turned away because she was not wearing a mask. The customer said “Well, I have a medical condition, I shouldn't have to wear a mask” and the security guard asked the individual customer, you know, “What is your medical condition? Why is that? Is there something we can do here to help you purchase goods from our store?” The individual simply got upset and left and filed a human rights complaint alleging that she was discriminated against based on a disability. But at the tribunal that that customer refused to tell the tribunal what her disability was, said “well that's private, I have a medical condition can't wear a mask, I don't have to tell you what it is.” And so what the tribunal said in those circumstances, in order to get the protections of the Human Rights Code, you need to be able to establish that you fit within a protected ground that is protected under human rights legislation, in her case, a disability. If you're not willing to do that, then your complaint is dismissed, because you haven't established that you have a disability. But they went further. And they said, But to be clear here, the human rights legislation does not protect someone because wearing a mask makes it difficult to breathe or causes anxiety that on its own is not enough to trigger the protections of the code. The code doesn't protect personal preferences not to wear a mask, because you believe they're pointless, or you disagree with mask wearing. So that's those are the findings of the tribunal in that case. And it to some extent, that was an easy case for the tribunal because the customer wasn't willing to provide any evidence of her disability. If there's a situation where a customer of a store has a bona fide disability that precludes them from wearing a mask, then this store organization would be required to accommodate that individual to the point of an undue hardship. So that could mean that you know, they would have to have curbside delivery, you know, offer to the customer. What's your list of goods you'd like to purchase? We will go do that for you. So there is obligations upon these organizations if someone has a bona fide reason for not wearing a mask and one thing about this case is that it was from September 2020. And at that point in time, in British Columbia, there wasn't a mandatory masking mandate indoors similar to now. And so those same kind of principles that, you know, organizations can have a policy that requires masks to enter their premises, provided that they do accommodate someone who has a bona fide disability, but that needs to be proven.
Mark Fancourt-Smith 04:56
You mentioned that there were two screening cases, what were the grounds of the second?
Nicole Skuggedal 05:00
Yeah, the second one involves the workplace context and religion. And so this case involved an employee who refused to wear a mask because it was his religious creed not to wear a mask. As we got to work said “I'm not wearing a mask today. This is my religious belief that I don't have to” the employer said, “Sorry, you can't come to work” and send him home and ultimately, his employment was terminated. The employee filed a human rights complaint and the arguments that he made before the tribunal were that wearing a mask interfered with his God given ability to breathe. He also argued that we are all made in the image of God. And a big part of his image was the ability to identify his face and to cover up his face, apparently dishonored to God. But this individual went further in his complaint. He also put a whole bunch of statements in about his belief that mask wearing was useless. It doesn't protect people from the Coronavirus, etc. and what the tribunal did with that is they said, “Look, the human rights legislation doesn't protect an individual's opinion that masks are ineffective. And that's not that isn't a religious belief that's protected. So you know, it's sort of an interesting case, because religious protection under human rights legislation has been very broadly defined, because the courts don't want to get into the position where they are a pining on what is the correct religious doctrine. But in this case, the individual went further. And really, this was a complaint about his belief with respect to masks not being effective. And so for that reason, the complaint was dismissed.
Alix Stoicheff 06:43
And so you had mentioned earlier that the Human Rights Tribunal in British Columbia is facing a significantly higher number of complaints these days are cases. And I'm wondering, is this higher caseload mostly related to masking? And if so, what effect Do you think these screening decisions will have on that caseload?
Nicole Skuggedal 07:01
The Human Rights tribunals reporting that the cases in the past year have dramatically increased to the highest level since the tribunal was created 18 years ago, and they have stated that a large number of these cases pertain to masking. So we are hopeful that the screening decision will reduce that caseload because the impact of that increase caseload on organizations that have complaints brought against them, and on individuals who want to have their human rights complaint heard before the tribunal or are being significantly adversely impacted by delays. Normally, as a respondent, you would know if a human rights complaint was filed against your organization's a four to six weeks. Now that's taking, you know, four to five months to get that notification. And then the entire process is also delayed. The first step in a human rights complaint is the parties have the option of participating in a voluntary mediation. And those mediations are highly successful, typically resolved the vast majority of human rights complaints. So useful process for the parties. That used to happen within two to three months, and now it's at least probably six months before you're getting to mediation. So the impact of this delay is fairly significant. And we've seen it in the context of masking cases where and you know, an individual waits a number of months to file a complaint, then the organization doesn't hear about the complaint from the Tribunal for another four months. Well, now we have, you know, six/eight/ten months have passed since the incident happened. It's very hard for an organization to go back, gather the evidence and, and the facts that happened at the time of the alleged human rights contravention.
Alix Stoicheff 08:45
And so switching gears a little bit away from the masking complaints, I understand that there has been a change in the human rights tribunals approach to compensation awards, and I'm wondering if you can tell us a little bit about that change and its implications.
Nicole Skuggedal 08:59
So when the Human Rights Tribunal finds that there has been a breach of the Human Rights Code in the employment context, they typically award two types of damages. One is damages for wage loss, and the other is damages for injury to dignity. We're seeing in recent case law in British Columbia an increase in both of these heads of damages. Historically, in BC, our human rights tribunals awards for wage loss, were somewhat similar to what we would see a court award for damages in an employment claim for wrongful dismissal. Human Rights may have been a bit higher historically, but not significantly. And there's been a clear departure from that. And I'm going to talk about one case just to illustrate that for you. And in that case, the tribunal said very clearly in this decision that wage loss awards for discrimination are inherently different from the calculation of reasonable notice damages in employment law. And that difference is the harm in a wrongful dismissal case, arises from the failure of the employer to provide reasonable notice of termination, whereas the harm in the human rights context is grounded in the effects of the discrimination on the complainant. So the damage award for wage loss will vary depending on the impact of the discrimination on the individual. And the case. It highlights that very well as a case within the last year. And I'll just quickly go over the facts of this case, there's an employee, she worked for a day, and was terminated at the end of her day, when she started her work day, she was asked to disclose whether she was taking any medications. She disclosed a number of prescriptions for various mental health conditions, proceeded to start work for the day in a clerical role. And it was very clear she could not perform the job duties. She couldn't, didn't know how to use Excel, her typing skills were very poor. So the end of that day, the employer decided not the right fit, we're going to terminate employment. In that termination meeting, the manager said to the employee, “Hey, why didn't you tell me about all these mental health issues when we hired you?” To which, the employee said “Well is that a problem?” and the manager said “That made me feel uncomfortable.” The employee then is dismissed and follows a human rights complaint alleging that her termination was related to her mental health conditions. The tribunal held that one part of the reason for termination was this individual's mental health conditions. And you only need one part to have a breach of Human Rights Code. There were many other reasons why this employee wasn't kept on, including her inability to perform the job. But because one part pertained to a ground and human rights legislation, there was a breach. And the impact of this termination on this employee was incredibly pronounced. She didn't leave her house for a year, she became suicidal, it damaged the relationship with her daughter. This was all proven on evidence at that before the tribunal. And so when the tribunal looked at this, they said, This discriminatory Act has had a very significant impact on this woman. And they awarded her 18 months wage loss with a 1/3 contingency in the event the at maybe she wouldn't have passed the probationary period. So ultimately, we have an employee who worked one day that received 12 months wage loss in the employment context, that same employee he would have worked one day in the probationary period probably would have been awarded nothing. And in that case, there was also $30,000 injury to dignity award. In another case in the past year, the tribunal found that there was a sexual harassment of a receptionist, the receptionist was employed for seven months and was awarded 19 months wage loss. In the employment context, the damage award for a seven receptionist was seven months of service would likely have been one to two months, so considerable increase in damage awards, a good reminder to employers out there to be very careful when they're human rights issues because they can be extremely costly.
Mark Fancourt-Smith 13:30
Now, the next topic we wanted to talk to the both of you about now I'll direct this to Jim was a relatively recent Supreme Court of Canada case from 2020 called Matthews and Ocean Nutrition Canada Ltd. in which the point of Dave Matthews not that Dave Matthews, but a Dave Matthews claimed constructive dismissal because of ongoing bullying and harassment, and the marginalization of his role. So before we dive into the implications that this case is having, and will continue to have for employers and specifically employment contracts, Jim, what can you tell us about the case?
Jim Boyle 14:02
Well, first, you know, it's probably good that you point out that it's not that Dave Matthews. Just because there may be some fans out there that would otherwise get excited. So this case is came out around the end of last year, it's a as you said, market Supreme Court of Canada decision that we think is going to have quite broad implications for employment contracts and employment law going forward, although those remains to be seen. So the plaintiff in this case, Mr. Matthews, was a very senior level chemist working for the employer. And he'd been working there for about 14 years or so. At some point a new executive came on to which Mr. Matthews reported. And this executive did not like Matthews, for whatever reason, and as the court put it started at a campaign of marginalization against Matthews, where they left him in doubt about his future prospects of the company. And they reorganized his reporting structure and took away some of his responsibilities, and basically just made Mr. Matthews feel very marginalized in this position that he'd held for a very long time. So Matthews was not happy about this situation, but sort of stuck it out for a while, partially on the basis that he suspected that the company would be sold at some point in the near future. And it's part of his terms of employment. In the event that the company was sold, he'll be entitled to a significant payout pursuant to the company's long term incentive program. So if he was around and still employed, at the time that the payout happened, he would get something in the range of $1.1 million, so significant amount of money that he didn't want to leave on the table. Now, the wrinkle was that the impediment to that payment was, according to his contract limited by limited to circumstances where he remained actively employed with the company at the time of the sale, the realization event for the purpose of the contract, and that he had not been terminated, whether with or without cause. So there's contractual language to that effect. Nevertheless, Mr. Matthews, at some point decided he couldn't take it anymore. And due to his treatment by the employer resigned from employment, about 13 months later, the company did go through a sale. So if Mr. Matthews had been employed and had been working at that time, there's very little debate, but he would have been entitled to this large long term incentive payment, or program payment. But, of course, so Mr. Matthews sued the company for wrongful dismissal, alleging constructive dismissal, which effectively means that he didn't actually resign, he was pushed out by the company. And when an employee is constructively dismissed in those circumstances, they can usually claim against the company for damages as if they had been terminated on a without cause basis. So he brought his claim. And in the lower courts, the courts concluded that he was entitled to 15 months reasonable notice. So the realization event this sale, had he kept working would have taken place at the 13 month mark, while he still would have been working. But the employer took the position that Well, I mean, that's fine that he may be entitled to 15 months reasonable notice, but our contract says that if he's not actively employed at the time that this realization event occurs, he's not going to get any payout anyway. So even though we terminated you, Mr. Matthews, without notice, due to the constructive dismissal, you're not entitled to anything. So this this issue wound is way up to the Supreme Court of Canada, and Supreme Court of Canada, looked at the issue and essentially reorganized the law, as applied to the sorts of provisions in contracts that limit entitlements on termination of employment. So what the Supreme Court of Canada said about this was that when you are approaching limiting clauses in a contract that purport to take somebodies entitlement to something like an L tap away, you need to go through an analysis to determine two things. One, you look at what an employee would have received during a reasonable notice period, if the employee had worked throughout that period. And then two, once you've determined what they would have earned, you look at the contract to see if the language unambiguously takes away that right. So the presumption is that if something would have been paid out, if you keep working that then it will be paid out unless there's some clear language that takes it away. So the court looked at the language in the agreement here that said that Mr. Matthews would have to be actively employed and that he wouldn't be entitled if he was terminated with or without cause and all that. And the court determined that what the what was lacking in the agreement was any stipulation that Mr. Matthews would not get paid out on termination without notice, or any other language that specifically said that even if you work during a reasonable notice period, you will not get paid this amount out. Ultimately, the court found that the language in issue did not take away Mr. Matthews, right or did not expressly set out or apply to the particular circumstances of this case. And therefore, the presumption that he would be entitled to anything that would have been paid out, had he not been terminated without notice stood, and Mr. Matthews was ultimately entitled to this very large payment.
Mark Fancourt-Smith 19:17
So a key takeaway from this for employers in particular is seems to be that they really need to carefully draft the employment contract to contemplate not just general but perhaps specific circumstances under which an employee would not be entitled to a bonus or other payments in the event that they're no longer working. Is that fair?
Jim Boyle 19:37
That's absolutely fair. So you know, I think that the big takeaway for employers here is that you need to very carefully draft these sort of oppressive clauses in contracts or clauses that might be seen by a court as being oppressive towards an employee, and make sure that they contemplate any of the possible circumstances that could arise in respect to the termination of employment. And if they don't contemplate circumstances, courts will read them, or courts will interpret them very strictly against the employer. And will not read into a contract any language that is not expressly set out on the face of the contract.
Nicole Skuggedal 20:19
And I would add to that, one point is that it also needs to be clearly explained to the employee, there's also been cases in the context of bonus plans and stock option plans where even if the language is crystal clear, the fact that the employee may not have understood it, or it wasn't brought to the employees attention can be a problem. So I think it's imperative on employers as well, to ensure that they're, they clearly document that clauses were brought to the employee's attention that it was easy for the employee to understand that it wasn't overly legalistic, you know, particularly if you're talking about more junior employees, that may not be able to understand and comprehend legal language.
Jim Boyle 20:58
Yeah, that's absolutely right. And, you know, as an example, we're seeing that come out in a bunch of Ontario cases these days where employees entitlement to, for example, commission is limited on termination of employment. And so you're, you're banging on Nicole, that the lesson from these cases is not only do you need to have a perfectly drafted clause, but you need to go through the work of sitting down with the employee and explaining to them the import of that clause. And as a sort of practical tip that employers might think about that was successful in at least one recent case. Having the employee initial each page of the contract, can be can assist in demonstrating that not only was the employee provided a copy of the agreement, but it was actually walked through with the employee. Now, again, just simply having somebody pro rata sign the corner of a contract is not necessarily going to win at the end of the day, the courts will evaluate the actual facts. So if the employee, in fact does not read it, the signs off in it that will be relevant. But there are little things that employers can do to help record the fact that if they are walking through the contract with the employee, that it did, in fact happen, and that will serve as evidence in the event there's a dispute about the fact that a trial.
Alix Stoicheff 22:12
Jim, you had mentioned in a recent discussion that we had, that there's an Ontario court decision that has applied Matthews in a way that is somewhat interesting and may be an Ontario court decision affect employees and employers specifically in Ontario. And that made me think as we move towards more acceptance of remote work, how are employers to deal with situations where an employee may have originally been employed in Ontario, but may now be performing a large portion of their work remotely from Alberta, Manitoba, or a different province in Canada?
Jim Boyle 22:46
That's an excellent question. And I think it's one that doesn't have a clear answer at this stage. Frankly, the way that our Employment Standards legislation is set up, is not really conducive towards the modern environment, the modern realities of work, Employment Standards, legislation, by and large is set up for circumstances where there is an employer located and operating in a single province and they have employees that stay in that province that you know, wake up in their houses, drive to the opposite works in the office or the factory all day and then come back home. The reality is that that the assumption of Employment Standards legislation is that where an employee is located, say in British Columbia and performs work in British Columbia, they will be subject to Employment Standards legislation. If the employer is located in another province and the employees to performing work in in British Columbia, then probably BC Employment Standards will still apply to that employee as well. If the circumstances are different, and the employee is working in another province say exclusively and the employer is located in BC. There's an arguable basis for saying the other provinces legislation will apply that employee instead of BC’s, the more complicated circumstance that we are encountering now is employees who work exclusively remotely. And you know, various times will work, say part of the year and BC part of the Year in Ontario part of the Year in Quebec maybe. And in those circumstances, it is not always necessarily going to be clear which Employment Standards legislation will apply to the employee at the end of the day. Different Employment Standards legislation has different requirements or guidance on what happens in those circumstances. I think Ontario's Employment Standards legislation actually has some commentary on that. But in BC, for example, the determination of whether or not VCs Employment Standards Act will apply to an employee is really contingent on the Employment Standards, branches, consideration of a number of contextual factors that really relate to, you know, is there a substantial connection between the work performed by the employee and British Columbia? So you know, if an employee is primarily located in British Columbia, but dips into Alberta temporarily and then comes back, their entire circumstance might still be governed by BC Employment Standards legislation, but it is less clear what happens where an employee works, you know, half the year in BC, and then the other half in Alberta. Want to say one last thing about that, you know, just in terms of the application of Employment Standards legislation, the reason this can be challenging for employers is because typically, you draft your employment contract to comply with the Employment Standards legislation of the province where you expect the employee to work. And so Employment Standards legislation differs from province to province a little bit. One of the most important differences can arise in the context of termination entitlements, what you know what notice or pay in lieu of notice, you get one termination of employment. And so usually when we're drafting an employment agreement, per say, BC employee, or an Ontario employee will draft that termination provision to ensure it complies with that legislation. But if you have an employee whose employment contract is compliant with or the termination clause is compliant with the termination provisions of one set of legislation, say BC is legislation that may not be compliant with the termination requirements of Ontario's Employment Standards legislation. So if you have that employee moving from BC to Ontario, with the same contract in place, and then that employees employment is subsequently terminated in Ontario, it may be that because the Ontario Employment Standards legislation applies that employee at that time that the termination provision is now invalid. And the employee might in those circumstances be entitled to a significantly higher amount of notice or pay in lieu and or reasonable notice a common law.
Nicole Skuggedal 26:43
I would say a good practice is never dismiss an employee in Ontario, if you can avoid it. Move the, back to BC and then end the employment relationship. That's not always practical.
Alix Stoicheff 26:55
Sounds like there's going to be some interesting decisions coming out on that very issue in the next few months or years. So we'll have to have you guys back on to chat about that.
Jim Boyle 27:03
Oh, absolutely.
Mark Fancourt-Smith 27:04
Well, Jim, Nicole, thank you so much for being on today. And like, like we said, we'll have to have to have you back on to discuss with, you know, what's happened in both of these subject areas. But thanks so much for coming.
Alix Stoicheff 27:14
Yeah, thank you very much.
Nicole Skuggedal 27:15
Thanks for having us.
Jim Boyle 27:16
Thank you very much.
Mark Fancourt-Smith 27:17
Thank you for joining us on Lawson insight and thanks again to Jim and Nicole for joining us today.
Alix Stoicheff 27:22
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