Top Developments in Canadian Employment Law in 2017

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With 2017 in our rear-view mirror and with 2018 now upon us, it is time to reflect on the top developments in Canadian employment law in 2017.

The following cases represent a cross-section of the most significant employment law decisions from across the country and are listed in no particular order.

1. Resigned to resign. Carroll v. Purcee Industrial Controls Ltd., 2017 ABQB 211

Jurisdiction: Alberta

An employee’s resignation must be clear and unequivocal to be effective and binding.

Purcee Industrial Controls Ltd. (“Purcee”) employed Mr. Carroll without a written employment contract. When Mr. Carroll’s relationship with Purcee began to deteriorate, Mr. Carroll tendered his resignation and requested a fair severance package. Purcee initially rejected Mr. Carroll’s resignation.

When Purcee finally accepted Mr. Carroll’s resignation, Purcee did not provide Mr. Carroll a severance package. Mr. Carroll claimed he was terminated without cause and was entitled to damages.

The Alberta Court of Queen’s Bench (“ABQB”) held that Mr. Carroll’s employment was terminated without cause because his resignation was not clear and unequivocal.

The ABQB applied the two-part test for determining whether a resignation is “clear and unequivocal”. The ABQB held that Mr. Carroll’s words were “an emotional reaction” and he was really only inviting Purcee to negotiate the terms of his termination, which would have included a severance package. Mr. Carroll’s resignation was not clear and equivocal because Mr. Carroll never indicated that he intended to resign by a specific date without a severance package. Further, Purcee never followed up with Mr. Carroll to confirm that “he truly intended to resign”.

To read more, please see our blog.

2. “I’d like a second opinion.” Bottiglia v. Ottawa Catholic School Board, 2017 ONSC 2517

Jurisdiction: Ontario

In certain circumstances, an employer may be justified in requesting an independent medical examination as part of the employer’s duty to accommodate under the Human Rights Code.

In 2010, Marcello Bottiglia went on sick leave from his employment with the Ottawa Catholic School Board (“OCSB”) after being diagnosed with unipolar depressive disorder with anxiety features.

Mr. Bottiglia’s last day of work was April 16, 2010. Mr. Bottiglia opted out of the OCSB’s long-term disability plan because he had accumulated approximately 465 paid sick days. While on leave, Mr. Bottiglia continued to accumulate paid sick days and vacation days.

In June 2012, Mr. Bottiglia’s treating physician reported that Mr. Bottiglias condition was relatively treatment resistant and a full recovery would take a prolonged period of time. Fast forward two months later to August 2012, Mr. Bottiglia’s physician changed his tune, stating that Mr. Bottiglia’s condition was improving and he would be able to return to work in the next two months. The OCSB was concerned by the physician’s contradictory reports. The physician’s recommendation was also suspect because Mr. Bottiglia’s paid time off would have ended on October 17, 2012—that is, Mr. Bottiglia would have run out of vacation and sick days. Concerned about whether Mr. Bottiglia’s was actually fit to return to work, the OCSB asked Mr. Bottiglia to undergo an independent medical examination (“IME”). Mr. Bottiglia refused to undergo the IME.

Mr. Bottiglia resigned from his employment without ever returning to work. Mr. Bottigilia then commenced a human rights application against the OCSB alleging that the OCSB had discriminated against him by failing to accommodate Mr. Bottiglia’s return to work. Mr. Bottiglia argued that the OCSB left him no choice but to resign because the OCSB improperly required Mr. Bottiglia to attend an IME before the OCSB would permit Mr. Bottiglia to resume the duties of his position.

The Human Rights Tribunal of Ontario (“HRTO”) dismissed Mr. Bottiglia’s application holding that the OCSB’s efforts to meet its procedural duty to accommodate Mr. Bottiglia by requesting additional medical information through an IME were reasonable.

On application for judicial review, the Ontario Superior Court of Justice (“OSCJ”) dismissed Mr. Bottiglia’s application, finding that the HRTO’s decision regarding the OCSB’s request for an IME was reasonable in the circumstances of the case. The OCSB was legitimately concerned about the accuracy and the reliability of the information it received from Mr. Bottiglia’s treating physician regarding Mr. Bottiglia’s condition, the accommodations needed and his ability to return to work. The Court held that “[i]n certain circumstances, the procedural aspect of an employee’s duty to accommodate will permit, or even require, the employer to ask for a second medical opinion.”

3. No employment relationship? No problem! British Columbia Human Rights Tribunal v. Schrenk, 2017 SCC 62

Jurisdiction: All (originating in British Columbia)

The Supreme Court of Canada (“SCC”) expands the reach of human rights legislation to discriminatory conduct beyond an employer-employee relationship to conduct that has a “sufficient nexus with the employment context”.

Mr. Sheikhzadeh-Mashgoul was employed by Omega and Associates Engineering Ltd. (“Omega”) as a civil engineer on a construction project. Mr. Schrenk was employed by Clemas Construction Ltd. (“Clemas”) as a foreman on the same construction project. While working on the construction project, Mr. Schrenk made discriminatory remarks directed at Mr. Sheikhzadeh-Mashgoul. As a result, Mr. Sheikhzadeh-Mashgoul filed a complaint with the British Columbia Human Rights Tribunal against Mr. Schrenk and Clemas alleging discrimination with respect to employment.

The SCC held that the British Columbia Human Rights Tribunal has the jurisdiction to hear a complaint regarding discriminatory treatment which an individual experienced during employment even though the individual who perpetrated the discriminatory conduct was employed by a different employer. So long as the discriminatory conduct has a “sufficient nexus with the employment context… [which] may include discrimination by… coworkers, even when those coworkers have a different employer”, the BCHRT has jurisdiction to hear the complaint.

For more details on this case, please read our article.

4. You can have your tort(e) and eat it too. Merrifield v. Canada (Attorney General), 2017 ONSC 1333

Jurisdiction: Ontario

The tort of harassment has been recognized as a distinct tort which differs from the tort of intentional infliction of mental suffering. Employees can sue in tort for workplace harassment.

Peter Merrifield is a member of the Royal Canadian Mounted Police. Mr. Merrifield alleged that he was harassed over an extended period of time by his superiors who made certain unjustified and unwarranted decisions about him based on allegations of untrustworthiness and political partisanship that had no merit and did not have an impact on Mr. Merrifield’s ability to perform his job. Mr. Merrifield claimed that the internal investigation his superiors conducted tarnished Mr. Merrifield’s reputation with the RCMP and caused him emotional distress.

In a lengthy decision, the Ontario Superior Court of Justice set out the test for the tort of harassment:

  • Was the defendant’s conduct towards the plaintiff outrageous?
  • Did the defendant intend to cause emotional distress or did the defendant have a reckless disregard for causing the plaintiff to suffer from emotional stress?
  • Did the plaintiff suffer from severe or extreme emotional distress?
  • Was the defendant’s outrageous conduct the actual and proximate cause of the emotional distress?

The Court was satisfied that Mr. Merrifield had proven the elements of the tort of intentional infliction of mental suffering, notwithstanding the absence of medical evidence.

The Court awarded Mr. Merrifield $100,000 in general damages for harassment and intentional infliction of mental suffering and $41,000 in special damages.

5. Throwing the baby out with the bathwater. North v. Metaswitch Networks Corporation, 2017 ONCA 790

Jurisdiction: Ontario

If any part of a termination clause is found to be contrary to law, the entire termination clause is void. A severability clause cannot operate to remove only the offending portion of the termination clause.

Metaswitch Networks Corporation (“Metaswitch”) terminated Doug North’s employment without cause. While employed by Metaswitch, Mr. North’s earnings consisted of salary plus commission.

The termination clause in Mr. North’s employment agreement offended the Employment Standards Act, 2000 (“ESA”) because it stated that any amounts owed would be based on Mr. North’s “base salary”, which contravened the ESA by explicitly excluding commissions. The employment agreement also contained a severability clause, which the applications judge used to excise only the offending sentence from the termination clause.

The Ontario Court of Appeal (“ONCA”) overturned the application judge, holding that it is an error of law to void only the offending portion of a termination clause and leave the rest of the termination clause to be enforced. The ONCA relied on its decision in Wood v. Fred Deeley Imports Ltd., 2017 ONCA 58 and the Supreme Court of Canada’s decision in Matchinger v. HOJ Industries Ltd, [1992] 1 SCR 986 for the rule an entire termination clause is void if the termination clause contracts out of one employment standard. Because the entire termination clause was void, the ONCA found that Mr. North was entitled to receive termination pay based on common law pay in lieu of reasonable notice.

6. Be careful what you wish for…  Papp v. Stokes et al, 2017 ONSC 2357

Jurisdiction: Ontario

Employers are not required to give a positive reference. An employer’s negative reference will not constitute defamation if the reference was truthful and given honestly and in good faith.

Stokes Economic Consulting (“Stokes”) terminated Adam Papp without cause. Dr. Stokes, the President of Stokes, agreed to be a reference for Mr. Papp.

Several months later, a prospective employer informed Mr. Papp that, subject to calling Mr. Papp’s references, an official offer was forthcoming.

In response to the prospective employer’s questions, Dr. Stokes stated that Mr. Papp had issues with work performance and attitude and that Mr. Papp did not work well with others. Dr. Stokes further stated that he would not rehire Mr. Papp if given the chance.

As a result of Dr. Stokes’ reference, the prospective employer informed Mr. Papp that he did not get the job.

Although Dr. Stokes’ comments were clearly defamatory, the Ontario Superior Court held that the justification defence applied because, on a balance of probabilities, Dr. Stokes’ comments were substantially true. The defence of qualified privilege (i.e. a claim that the statement was made in a protected context, e.g. during a reference check) also applied.

To read more, please see our blog.

7. Speak now, or forever hold your peace. Stewart v. Elk Valley Coal Corporation, 2017 SCC 30

Jurisdiction: All (originating in Alberta)

Employers can terminate an employee suffering from addiction if the employee fails to disclose a drug or alcohol addiction in accordance with an alcohol and drug policy.

Elk Valley Coal Corporation (“Elk Valley”) has an “Alcohol, Illegal Drugs & Medication Policy” (the “Policy”) which requires employees to disclose alcohol and drug dependency and addiction issues, without fear of discipline. However, if an employee tested positive for drugs or alcohol after a workplace accident, Elk Valley would terminate the employee’s employment for failing to disclose his or her dependency or addiction issues.

After post-accident testing revealed that Mr. Stewart had cocaine in his system, Elk Valley terminated Mr. Stewart’s employment because he had not disclosed his addiction.

Although the Alberta Human Rights Tribunal (“AHRT”) concluded that Mr. Stewart suffered from a mental disability (i.e. addiction), the ARHT held that Mr. Stewart had not established a prima facie case of discrimination.

The AHRT found that Elk Valley only terminated Mr. Stewart because he violated the Policy. There was no nexus between Mr. Stewart’s disability and his termination. In the alternative, the AHRT stated that if there was prima facie discrimination, Elk Valley had discharged its obligation to reasonably accommodate Mr. Stewart’s disability to the point of undue hardship. 

The Supreme Court of Canada upheld the AHRT’s decision.

To read more, please see our article.

8. Safety first, privacy second? Sometimes...  Suncor Energy Inc. v. UNIFOR Local 707A, 2017 ABCA 313

Jurisdiction: Alberta

Employers may implement random drug and alcohol testing where (i) there is a demonstrated problem with alcohol and drug use in dangerous workplaces and (ii) the policy is a proportionate response after weighing safety concerns and privacy interests.

In 2012, Suncor implemented a policy of random drug and alcohol testing for all its workers (union, non-union and contractors) in safety-sensitive positions in the Fort McMurray area. Unifor grieved against Suncor on the bases that random drug and alcohol testing infringed the workers’ privacy rights and the Policy did not apply to the unionized workers.

The Alberta Court of Appeal held that the random drug and alcohol testing policy was enforceable against employees in the Unifor bargaining unit.

The majority of the arbitral panel erred by:

  • applying more stringent requirements than those articulated by the Supreme Court of Canada (“SCC”) in Irving Pulp & Paper Ltd. v. CEP, Local 30, 2013 SCC 34. The arbitral panel incorrectly required Suncor to adduce evidence of a “significant” or “serious” problem, which constituted an unwarranted elevation of the Irving test which only requires “evidence of enhanced safety risks, such as evidence of a general problem with substance abuse in the workplace”.
  • only considering evidence that demonstrated substance abuse problems within the bargaining unit and ignoring the evidence related to the broader workplace population; and
  • failing to consider all the relevant evidence.

To learn more, please see our blog.

9. Timing isn’t everything.  Whitmore v. Dr. J. T. Kelsall Inc., 2017 BCHRT 114

Jurisdiction: British Columbia

An employee can be dismissed after returning from medical leave so long as the employee’s disability is not a factor in the decision to dismiss.

Ms. Whitmore went on medical leave because she suffered from a medical issue that required corrective surgery. Following the surgery, Ms. Whitmore attempted to return to work twice unsuccessfully. Finally, Ms. Whitmore tried a one-day “trial work period” to determine whether she was fit to return to work. Three days after the trial, Dr. Kelsall terminated Ms. Whitmore’s employment.

While the timing of Ms. Whitmore’s dismissal seemed to support her claim for discrimination on the basis of disability, the British Columbia Human Rights Tribunal (“BCHRT”) held that, based on the circumstances and the overwhelming evidence of Mr. Whitmore’s poor work performance, timing alone was insufficient in proving discrimination.

The BCHRT relied on evidence which indicated Ms. Whitmore could not properly manage paperwork, had difficulties in scheduling patients and would not follow Dr. Kelsall’s established procedures. While Ms. Whitmore was on leave, Dr. Kelsall also discovered that Ms. Whitmore failed to respond to requests for consultations from other physicians, failed to send approximately 350 faxes, which included important patient information, and did not properly deal with billings, appointment bookings or referrals.

To read more, please see our blog.