In-Depth Analysis

Employers’ Advisor December 2021

Articles:

  1. Jab or Job: Drafting an Enforceable Mandatory Vaccination Policy
  2. Enforceability of Termination Clauses in Employment Contracts: What Employers Need to Know
  3. Employment in the “Gig Economy”: Emerging Issues and the Future of Work

Jab or Job: Drafting an Enforceable Mandatory Vaccination Policy

Tristan Hunter

As COVID-19 vaccines are now widely available, many businesses are in the process of implementing or updating COVID-19 mandatory vaccination policies aimed at keeping their employees and customers safe, while at the same time operating in as efficient a manner as possible.

Some employees and unions have sought to challenge mandatory vaccination policies (and even other, more flexible, vaccination policies) and thus far, there have been at least three arbitration decisions addressing the validity of such policies. These recent decisions provide further guidance as to the best practices and considerations employers should consider when reviewing or drafting a mandatory vaccination policy for their workplace.

Guidance from Arbitrators – Decisions Addressing Vaccination Policies

The results of the jurisprudence issued to date confirm that there is no “one size fits all” answer to whether or not a mandatory vaccination policy will be upheld by an adjudicator. The potential validity of a vaccination policy will depend upon the circumstances unique to each workplace – including, for example: the rate of voluntary vaccination amongst employees; the extent to which employees come into contact with members of the public or each other; the extent to which the employer has been able to control the spread of COVID-19 at work; the nature of the employer’s operations, etc.

In Paragon Protection Ltd. and UFCW, Local 333, the employer had implemented a mandatory vaccination policy which required all employees to be vaccinated by a certain date or face disciplinary action up to and including termination. The arbitrator found that the policy was reasonable.

In Electrical Safety Authority and PWU, the employer implemented a mandatory vaccination policy that required all employees to be vaccinated by a certain date, failing which they would be put on unpaid leave and eventually be terminated. Prior to the implementation of the policy, the employer had allowed unvaccinated employees to undergo rapid testing in lieu of vaccination. The arbitrator struck the policy down, finding it to be an unreasonable exercise of management rights.  The arbitrator did, however, leave the door open for the employer to, in future, implement a mandatory vaccination policy that would place unvaccinated employees on unpaid leave, should “safety concerns become such that they cannot be adequately addressed by a combined vaccination and testing regime.”

In Ontario Power Generation and PWU, the employer implemented a “vaccinate or test” policy which provided employees the option to undergo rapid antigen testing in the event that they did not want to be vaccinated. If they refused both options, they would be placed on an unpaid leave of absence and then eventually face termination if they continued to refuse to comply with the policy. The arbitrator upheld the policy.

Content of the Policy

COVID-19 vaccination policies should, at minimum, include the following information:

  • The scope of the policy;
  • The purpose of the policy (i.e. controlling the spread of COVID-19);
  • Timelines for compliance with the policy, with reasonable advance notice (i.e. when the policy’s  vaccination requirements take effect);
  • The accepted exemptions to mandatory vaccination and confirmation of accommodation efforts to be undertaken by the employer where necessary;
  • Consequences for non-compliance with the policy;
  • Protocols in place to protect employee privacy;
  • Educational resources and contact information if the employee has questions; and
  • Any incentives implemented by the employer to encourage vaccination.

Potential Risks

Potential risks for employers who implement mandatory vaccination policies include:

  • The implementation of such a policy may be found to amount to constructive dismissal in the non-union context or an unreasonable exercise of management rights in the union context;
  • Employers must accommodate employees who are subject to legitimate human rights exemptions (e.g. employees who are medically unable to be vaccinated);
  • Employers must have proper safeguards in place to protect sensitive information regarding employees’ vaccination status;
  • Potential public relations risk;
  • Impact on employee morale/retention; and
  • An adverse reaction to a work-mandated vaccine may be compensable under workers’ compensation.

On the other hand, employers who do not undertake sufficient efforts to control the spread of COVID-19 may be found to be in violation of their duty to ensure the health, safety and welfare of their workers under occupational health and safety legislation.

Alternative Options

For employers who do not wish to implement a mandatory vaccination policy in the workplace, less stringent alternatives include the following options:

  • Implementing a voluntary policy where the employer encourages staff to receives the vaccine and provides educational resources to overcome “vaccine hesitancy.” This could also include certain incentives, such as paid time off or other monetary incentives, in order to receive the vaccine on the employees’ own time;
  • Implementing a policy where non-vaccinated employees are prevented from doing certain tasks, provided such restrictions are rationally connected to the risk of transmission; or
  • Implementing a policy whereby non-vaccinated employees are subject to additional health and safety measures such as regular testing requirements and/or enhanced PPE requirements.

The state of COVID-19 in Canada (and associated government legislation) continues to rapidly evolve. Employers should continue to review their policies and practices, on an ongoing basis, to ensure they remain in compliance with the law and are consistent with the most up-to-date best practices.

Enforceability of Termination Clauses in Employment Contracts: What Employers Need to Know

Jessica Visser

Courts continue to evolve the law (and some might even suggest to “move the goalposts”) regarding the enforceability of termination clauses in employment contracts. Recently. The Ontario Court of Appeal in Waksdale v. Swegon North America Inc. (“Waksdale”), dramatically altered the landscape when it comes to the enforceability of termination clauses in employment agreements.

Background on Termination Clauses and Reasonable Notice

In Ontario and other common law provinces in Canada, there is a presumption at common law that an employee is entitled to reasonable notice of termination (or pay in lieu of such notice), where the employee is terminated “without cause”.  However, employers can limit an employee’s entitlements upon termination to only that which is required under statute, including the Ontario Employment Standards Act, 2000 (“ESA”), as long as the employment contract contains clear, enforceable language to that effect.

If a termination clause contains language that is ambiguous or if it has even the potential to provide an employee with less than their statutory entitlements, a Court will likely void the termination clause and find that the employee is entitled to common law notice – which in most cases will be much more than their minimum statutoryentitlements.

How did Waksdale Alter Termination Clauses?

The effect of the Waksdale decision is that “just cause” termination provisions in an employment contract will generally be unenforceable and that this will, in turn, render invalid the entire termination clause, including the “without cause” sections of the termination clause. This is so despite the presence of any severability clause in the employment contract that purports to “sever” from the rest of the employment contract any clause found to be unlawful or unenforceable.  

What exactly happened in Waksdale?

In Waksdale, the employer terminated the employee on a “without cause” basis, and took the position that his entitlements upon termination were limited by his employment contract to only his minimum ESA entitlement. The employee took the position that even though he was terminated “without cause,” the with cause termination provision in his employment contract was illegal and therefore invalidated the entirety of termination provisions in the employment contract.

The employment contract in question had two separate termination provisions that were contained in different paragraphs within the contract – one “without cause” termination provision and one  provision that allowed for termination without notice on a “with cause” basis. The parties agreed that the “with cause” clause was unenforceable because it provided a lesser benefit than what is provided for under the ESA (which entitles employees to termination pay unless they are guilty of “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”, which is a different standard than that of “just cause” for termination under the common law).

The Ontario Court of Appeal determined the termination provisions had to be read as a whole, regardless of whether or not they were contained in different sections of the employment contract.  Therefore, because the “with cause” termination provision in the case was contrary to the ESA, the Court of Appeal held that all of the termination provisions were considered null and void and unenforceable for all purposes.  In reaching this decision, the Court of Appeal refused to give any effect to the employment contract’s severability clause. It reasoned that a severability clause cannot have any effect on clauses of a contract that have been made void by statute. 

Post-Waksdale Developments

The Court of Appeal’s reasoning in Waksdale has been followed in subsequent cases. However, one post-Waksdale case, Rahman v. Cannon Design Architecture Inc. (“Rahman”) provided some good news for employers regarding their ability to rely on termination provisions. In Rahman, the Ontario Superior Court of Justice distinguished the case before it from Waksdale on the basis that the employer and employee had equal bargaining power in negotiating the employment agreement and shared a mutual intention to not contract out of the ESA. The Court therefore held that the termination provision before it, which denied entitlements upon termination for “just cause,” was valid and enforceable.

That said, the sense of whiplash continues: in the even more recent case of Campbell-Givons v. Humber River Hospital, the Court declined to follow Rahman and ruled that the employee’s level of sophistication was irrelevant. In finding the entire termination clause to be unenforceable, the Court ruled that a termination provision “either violates the ESA or it does not,” regardless of the individual sophistication or bargaining power of the employee in question.

What does this mean for Employers?

It might be time to revisit your employment agreements!

Some key takeaways for employers from these decisions are:

  • The enforceability of any termination provision will depend on the specific wording of the provision;
  • Employers should carefully vet their termination provisions to ensure that they are not in violation of applicable provincial employment standards legislation;
  • Employers should retain all communications leading up to the formation of any employment agreement; and
  • Employers should seek legal advice if there is any uncertainty regarding the enforceability of any termination clauses.

Employment in the “Gig Economy”: Emerging Issues and the Future of Work

Tara Russell

People have always engaged in non-standard work arrangements.  Today, however, driven in part by the growth of digital intermediary platforms like ridesharing and food delivery applications, non-standard work arrangements have exploded into the mainstream.  As the modern workplace continues to evolve, the existing understanding of the relationship between “employers” and “employees” is facing new scrutiny.  Several recent cases have focused public attention on this issue, highlighting some of the employment-related challenges that organizations may face in this new world of work.

The “Gig Economy”

The “gig economy” is a term that describes the growing market for certain non-standard work arrangements, whereby organizations contract with independent contractors for short-term engagements. The idea of a gig economy encompasses all manner of such non-standard work arrangements, including part-time, temporary, contract, freelance, self-employed and unpaid positions. However, the term is most frequently used to describe work associated with digital applications or online intermediary platforms.

The work arrangements associated with the gig economy have generally been framed as independent contractor relationships.  These arrangements permit individuals greater control and flexibility in their work lives while organizations gain access to a flexible and competitive labour source.

In recent years, however, gig economy workers have launched a number of legal proceedings that have revisited the question of what makes someone an “employee” in the modern workplace. 

Are Gig Economy Workers Entitled to Employment Standards Protections?

The answer to this question is still to be determined by the Court in Heller v. Uber Technologies, a now certified class action proceeding about whether Uber Eats drivers are “employees” or independent contractors. The class action is aimed at securing certain benefits under the Ontario Employment Standards Act, 2000 (“ESA”), including minimum wage and vacation pay, on behalf of a class of Ontario Uber Eats drivers (currently classified by Uber as independent contractors, without access to the ESA). 

Most recently, in response to Uber’s challenge to stay the class action proceeding because of a mandatory arbitration clause, the Supreme Court of Canada (the “SCC”) held that it was the Ontario courts, not an arbitrator in the Netherlands, that will decide the issue. The SCC refused to enforce what it found to be an improvident bargain reached between Uber and the drivers, resulting from an inequality of bargaining power. The SCC referred to the agreement as a classic case of unconscionability. For reference, the arbitration provision required any dispute to be resolved in Amsterdam, with an upfront payment of $14,500 USD in administrative fees to access the arbitration process.  Practically, drivers had no way of resolving any dispute with Uber if the clause was enforced.

The Heller class action continues in Ontario, leaving the issue of the employee status of gig economy workers under employment standards legislation to be determined by the courts.

Can Gig Economy Workers Unionize?

In the recent Ontario Labour Relations Board case of Canadian Union of Postal Workers v Foodora, which considered employment status of gig economy workers, the answer was “yes.” CUPW was certified as the bargaining agent of Foodora couriers in Toronto and Mississauga on the basis that they were dependent contractors (and therefore fell within the definition of “employees”) within the meaning of the Ontario Labour Relations Act.

Despite the ability of Foodora couriers to control their work hours, work location, and provide services to other companies, the Board held that, among other factors, restrictions on subcontracting, Foodora’s ownership and control over the Foodora App, and the system of incentives and restrictions controlling courier behaviour, strongly resembled a part-time employment relationship. The Board rejected an approach focused on a numerical threshold of Foodora sourced income in assessing contractor status, finding that at the end of the day, the couriers worked for Foodora, not for themselves. The couriers, having been determined to be employees of Foodora for labour relations purposes, ultimately voted to unionize the company – although Foodora had ceased operating in Ontario by the time the ballots were counted. The Board’s decision in Foodora could have a significant impact on the understanding of the relationship between organizations and workers in the broader gig economy, especially in Ontario in light of the ongoing efforts to certify Toronto Uber Black drivers.

However, the British Columbia Labour Relations Board declined to address the issue in Lyft Canada Inc. v. United Food and Commercial Workers International Union, Local 1518, where the UFCW had sought a declaration that Lyft and Uber drivers were dependent contractors in anticipation of a possible certification application. The Board dismissed the application for declaration without deciding the issue of driver status, leaving the question open about whether gig economy workers are capable of organizing in BC.

Looking Ahead

The worker-driven challenges to the traditional understandings of “employee” in the context of the gig economy that are currently making their way through legal channels will have a significant impact on the modern workplace, whatever their outcome.

Stay tuned for further developments, and contact a Mathews Dinsdale lawyer for assistance navigating the impacts of these developments on your business.

With these tips in mind, we wish you and your employees a safe and happy holiday season!

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This newsletter is not intended as legal advice.  Any employer or organization seeking assistance should feel free to contact a Mathews Dinsdale lawyer for assistance.

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