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COVID - Labour/Employment. Croke v. VuPoint System Ltd.
In Croke v. VuPoint System Ltd. (Ont CA, 2024) the Ontario Court of Appeal dismissed an employee's wrongful dismissal action against their employer, here where the major subcontractor of their employer adopted a mandatory COVID vaccination policy which made it effectively impossible for them to work. The employer refused to reveal their vaccination status, and was consequently fired:[15] The motion judge considered the requirements of frustration set out by the Supreme Court of Canada in Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58, [2001] 2 S.C.R. 943, at paras. 53 and 55. She then compared this case to Fraser Health Authority v. Hospital Employees’ Union (Tracy London Termination), 2022 CanLII 91089 (B.C.L.A.), in which an employment contract was found by an arbitrator to have been frustrated because of the employee’s non-compliance with a COVID-19 vaccination policy her employer was required to enforce. Like the arbitrator in Fraser Health Authority, the motion judge also compared the appellant’s situation to cases where an employee’s contract is frustrated because of a statutory or legal change that renders them unqualified for their job and therefore unable to work: see e.g., Cowie v. Great Blue Heron Charity Casino, 2011 ONSC 6357 (Div. Ct.).
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[21] The test for frustration in contract law is well settled. As the Supreme Court of Canada stated in Naylor, at para. 53, “[f]rustration occurs when a situation has arisen for which the parties made no provision in the contract and performance of the contract becomes ‘a thing radically different from that which was undertaken by the contract.’”
[22] A party alleging frustration must therefore establish that there was a “supervening event” that: (i) radically altered the contractual obligations; (ii) was not foreseeable and for which the contract does not contemplate; and (iii) has not been caused by the parties.
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[27] The motion judge relied on Fraser Health Authority, which she found to be analogous to this case. In Fraser Health Authority, an employee was terminated after she refused to become vaccinated to comply with a government order requiring all health care workers to be fully vaccinated in order to continue working. The Union filed a grievance maintaining there was no just and reasonable cause for the termination.
[28] The arbitrator applied the doctrine of frustration to find that the termination was justified. However, the arbitrator’s analysis focused on the reasonable foreseeability that there would be a change in circumstance, either through the removal of the vaccination requirement or a change in the employee’s position on vaccination. She did not consider the voluntariness of the employee’s conduct in the context of the frustration analysis.
[29] The motion judge, in applying Fraser Health Authority, similarly did not specifically address whether the appellant’s voluntary choice to remain unvaccinated prevented the doctrine of frustration from being brought into play. However, in my view, it did not.
[30] This is not a case where the conduct of the appellant in fact frustrated the employment contract. Rather, I accept, as did the motion judge, that the Bell Policy was the supervening event which frustrated the contract.
[31] The letter informing VuPoint of the Bell Policy, dated September 8, 2021, reproduced above, stated: “Bell requires that all personnel who work at or visit any Bell location or interact in-person with Bell customers be fully vaccinated by September 20, 2021.”
[32] The Bell letter regarding this Policy made no reference to the conduct of employees, nor was the conduct of individual employees relevant for the application of the Bell Policy. Under the Bell Policy, it did not matter whether a person conducting field service work for Bell chose not to get vaccinated, could not obtain vaccinations in their region or could not get vaccinated due to medical or religious factors. The effect of the Bell Policy, from VuPoint’s position, was akin to that of a new regulatory requirement: absent vaccination, VuPoint’s employees were ineligible to work on Bell projects, which was nearly all of VuPoint’s work.
[33] By analogy, consider the situation that would arise if an employee who is required to drive a truck suddenly had to obtain a new class of driver’s license due to a change in the licensing scheme, or if a technician working in law enforcement settings had to obtain a new form of security clearance in the wake of national security threats. As a result of these changes, the truck driver or law enforcement officer would no longer be eligible to continue the work for which they were hired unless they obtained the new licence or clearance.
[34] Whether an employee affected by such a supervening event can or will seek once again to become qualified (or, in this case, vaccinated), is not relevant to a threshold determination of whether the doctrine of frustration is applicable, although, as discussed below, it may be relevant to the other branches of the legal test. This is because it is not the employee’s choice or conduct that renders them unable to work but, rather, the introduction of the new requirement that they do not satisfy. In other words, it is the new requirement that is the supervening event. The analysis therefore proceeds to determine whether that requirement was foreseeable or contemplated in the contract, and whether it radically alters the contractual obligations.
[35] In oral submissions, counsel for VuPoint conceded the appellant may not have been terminated if he had indicated he wished to become vaccinated, but needed more time. The evidence before the motion judge also indicated that the appellant’s termination may have been revoked had he responded that he intended to become vaccinated. VuPoint’s openness to allowing the appellant to rectify his ineligibility to continue to perform services for Bell does not lead to a finding that the frustration of the employment contract in this case was self-induced.
[36] Rather, the possibility or likelihood that an employee could rectify the disruption to an employment contract caused by a supervening event is relevant to the requirement that, in order for frustration to apply, the supervening event must result in “a radical change to the fundamental obligations of the contract.” This may, in turn, be affected by either the duration of the supervening event or the duration of the effect that event has on the specific employment relationship.
[37] In other words, if there was evidence that the Bell Policy was a temporary, emergency measure to be of short duration, or if there was evidence that the appellant intended to become vaccinated but could not do so before the Bell Policy came into effect, the fundamental obligations in the employment contract may not have been found to have been “radically altered” by the Bell Policy.
[38] However, that was clearly not the case here. The motion judge found that the appellant had not advised VuPoint that he intended to become vaccinated, despite his awareness that termination could result from non-compliance with the Policy, as discussed below. Furthermore, VuPoint had no knowledge of the timeline of the Bell Policy and there was no evidence in the record that the vaccination requirement would be simply a temporary or short-lived measure. Moreover, in the circumstances here, I do not think it is realistic to have expected VuPoint to have “bargained with Bell Canada for more discretion over matters of health and safety”, as the appellant argues. The Bell Policy was plainly motivated by a reasonable concern relating to the COVID-19 pandemic and that its customers may not want unvaccinated installation technicians entering their homes.
[39] In short, the key point is that the reason for the appellant’s termination was not any choice he made with respect to his vaccination status, nor could the conduct of the appellant or the respondent alter the Bell Policy. As the motion judge stated:I find that there was no default in the employment agreement by either Mr. Croke or VuPoint. VuPoint was required, by contract, to comply with Bell’s policies. The fact that the Plaintiff could have chosen to be vaccinated does not mean that he was in default as the circumstance which caused the frustration was the result of a decision by Bell, not the Plaintiff or the Defendant. VuPoint also had no control or knowledge over the timeline of Bell’s Policy and was given no indication that the policy was implemented as a temporary measure. [Emphasis added.] [40] Once the Bell Policy is recognized as the supervening event, the applicability of the doctrine of frustration turns on (i) whether, in light of Bell’s Policy, performance of the employment contract had become something radically different than what the parties had contracted for, given that the appellant was no longer qualified to undertake the work for which he was hired, and (ii) whether that change was foreseeable when the contract was formed. I turn to these questions below.
[41] As for the first ground of appeal, based on the analysis above, I would conclude frustration was available to the motion judge, irrespective of the appellant’s conduct. . Sullivan v. Canada (Attorney General)
In Sullivan v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considers a COVID-related JR brought to challenge an EI decision by the Appeal Division of the Social Security Tribunal, here where the applicant was denied benefits [under s.30 ('Disqualification — misconduct or leaving without just cause') of the Employment Insurance Act]:[2] The applicant was denied benefits under section 30 of the Employment Insurance Act, S.C. 1996, c. 23. The Appeal Division, affirming a decision by the General Division delivered on November 7, 2022, held that the applicant was disqualified from receiving employment insurance benefits when he lost his job due to misconduct. He had failed to comply with his employer’s COVID vaccination policy.
[3] The applicant argued before both Divisions that he did not engage in misconduct on the job. Among other things, he focused on the validity of the employer’s vaccination policy.
[4] The Appeal Division rejected the applicant’s argument. Following applicable court jurisprudence (e.g., Canada (Attorney General) v. McNamara, 2007 FCA 107 at paras. 22-23, Paradis v. Canada (Attorney General), 2016 FC 1282 at paras. 30-31 and Cecchetto v. Canada (Attorney General), 2023 FC 102), the Appeal Division held that the test for misconduct focuses on the employee’s knowledge and actions, not on the employer’s behaviour or the reasonableness of its work policies. It added that the applicant could pursue remedies elsewhere if he considered that his employer treated him improperly.
[5] In our view, the Appeal Division’s decision is reasonable. It is supported by the evidentiary record before it and applicable court jurisprudence.
[6] We would add that the court jurisprudence makes sense. Were the applicant’s submissions to be upheld, the Social Security Tribunal would become a forum to question employer policies and the validity of employment dismissals. Under any plausible reading of the legislation that governs the Tribunal, it is a forum to determine entitlement to social security benefits, not a forum to adjudicate allegations of wrongful dismissal. We note that the applicant in fact has pursued remedies elsewhere for wrongful dismissal and has made a human rights complaint.
[7] Before both Divisions of the Social Security Tribunal, the applicant raised the Canadian Bill of Rights, S.C. 1960, c. 44. He raises it again here to suggest that his “misconduct” did not legally constitute misconduct. Here again, as explained above, this submission is legally irrelevant to the Social Security Tribunal’s task. Under its governing statute, the Social Security Tribunal cannot assess whether the applicant’s dismissal from employment was wrongful.
[8] In this Court, the applicant has raised the Charter in support of his claim. In the General Division, he raised Charter arguments but expressly withdrew them. Thus, his Charter arguments in this Court are a new, inadmissible issue: Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654. We add that all Charter arguments, whether based on rights, freedoms or values must be supported by a rich evidentiary record, not by the “unsupported hypotheses of enthusiastic counsel” or judges: see the venerable, unquestioned case of Mackay v. Manitoba, 1989 CanLII 26 (SCC), [1989] 2 S.C.R. 357, 61 D.L.R. (4th) 385 at 362. We do not have that sort of evidentiary record here.
[9] Just a couple of weeks before the appeal hearing, the Supreme Court released its decision in Commission scolaire francophone des Territoires du Nord-Ouest v. Northwest Territories (Education, Culture and Employment), 2023 SCC 31. In that decision, the Supreme Court held that decision-makers, at least in some circumstances, must take into account values resident in the Charter and that reviewing courts can consider them even where administrators have not considered them. Out of fairness to the applicant, we invited him to make submissions on whether the Tribunal should have taken into account any Charter values in this case.
[10] The applicant submits that Charter values of “freedom” and “equality”, as broad and unqualified as they are, should have been considered. He submits that the Appeal Division should have used “freedom” and “equality” to whittle down or eradicate the vaccination requirements that were enforced against him. We reject this submission.
[11] The text of the Charter and case law under it heavily qualifies “freedom” and “equality”. And everything in the Charter is subject to reasonable limits prescribed by law under section 1. As well, it must also be remembered that section 1 of the Charter, in binding words that cannot be ignored, says that the Charter protects the “rights and freedoms set out in it”, not other things such as “values”. Thus, the “values” that administrative decision-makers are to take into account cannot be broader than, undercut or do an end run around the established scope of the “rights and freedoms set out” in the Charter determined in accordance with the seminal, binding Supreme Court authority of Quebec (Attorney General) v. 9147-0732 Québec Inc., 2020 SCC 32, [2020] 3 S.C.R. 426. Undercutting the applicant’s submission is the fact that there are no Charter cases recognizing a general, unqualified entitlement to “freedom” or “equality”.
[12] It is worth adding that under Commission scolaire, Charter values cannot be used to invalidate legislative provisions that administrative decision-makers must follow, such as, in this case, section 30 of the Employment Insurance Act. Only unjustified violations of rights and freedoms can strike down legislation. Here, as we have said, the Social Security Tribunal was reasonable in holding that the applicant was precluded under that section and related court jurisprudence from questioning the appropriateness of the termination of his employment.
[13] The applicant also submits that he has been treated in a procedurally unfair manner. He focuses on the Social Security Tribunal receiving unsworn testimony. The Appeal Division answered this at paras. 15-16 of its decision, holding that it does have the power to receive unsworn testimony. We agree with this conclusion and the reasons offered by the Appeal Division.
[14] The applicant is certain that he was wrongly dismissed. We sympathize with his plight but as a court of law we are bound to apply the law. As mentioned above, the law is that the Social Security Tribunal cannot delve into whether the dismissal was proper or the reasonableness of the employer’s work policies that led to the dismissal. . Francis v. Canada (Attorney General)
In Francis v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered (and upheld) a JR "of a decision of the Appeal Division of the Social Security Tribunal" regarding an employment insurance benefits denial. The material facts were that the employee "refused to comply with the employer’s mandatory policy to obtain a COVID-19 vaccination":[2] The benefits were denied pursuant to s. 30 of the Employment Insurance Act, S.C. 1996, c. 23. This section provides that an employee is disqualified from receiving employment insurance benefits if the employee loses employment due to misconduct.
[3] The applicant was dismissed by his employer on the ground that he refused to comply with the employer’s mandatory policy to obtain a COVID-19 vaccination. The applicant had requested an exemption from the policy based on creed but the employer denied this request. . Perrin v. Canadian Union of Public Employees
In Perrin v. Canadian Union of Public Employees (Fed CA, 2023) the Federal Court of Appeal considered a JR of a CIRB [Canada Industrial Relations Board] 'duty of fair representation' (s.37 of the Canada Labour Code) decision, here regarding COVID vaccination policy which the union did not grieve:[2] The applicants alleged in their complaint that the Union breached its duty by refusing to file a policy grievance challenging Air Canada’s mandatory vaccination policy. The applicants are a group of flight attendants, pursers and service directors employed with Air Canada. Ms. Perrin was mandated to bring the complaint on their behalf.
[3] In its decision, the Board found that since the factual considerations and legal arguments raised in the complaint were substantially similar to those reviewed and addressed in its recently issued decision Ingrid Watson v. Canadian Union of Public Employees, 2022 CIRB 1002 [Watson], it could rely on its analysis and rationale. In Watson, it had concluded that the Union had not breached its duty of fair representation when it refused to file a policy grievance with respect to Air Canada’s mandatory vaccination policy. The Board’s decision has since been upheld by this Court in Watson v. Canadian Union of Public Employees, 2023 FCA 48 [Watson FCA].
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[10] ... Moreover, contrary to the applicants’ assertion, the Board did examine the Union’s conduct. It found that the Union had communicated regularly with its membership regarding the implementation of the policy, and that it had turned its mind to the issues raised by the members, including those who disapproved of the policy for various reasons. The Board was not required to refer to every document in the record, to respond to every argument or to make an explicit finding on each element leading to its conclusion (Vavilov at paras. 91, 128; Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62 at para. 16). There is no basis for concluding that the Board ignored evidence or that it failed to grapple with any of the issues raised by the applicants. . National Organized Workers Union v. Sinai Health System
In National Organized Workers Union v. Sinai Health System (Ont CA, 2022) the Court of Appeal, in the course of reviewing a lower court's interlocutory injunction RJR-Macdonald analysis, states the central conclusion of the courts generally on the tension between employer COVID vaccination policies and employees who don't want to follow them:[38] The application judge made no palpable and overriding factual error in the findings she made about the harm at issue if injunctive relief were not granted. At its core, the harm at issue was the potential for being placed on leave without pay or terminated under the Policy, if an employee chose to remain unvaccinated. The appellant’s members were not being forced to be vaccinated, denied bodily autonomy, or denied the right to give informed consent to vaccination. They could choose to be vaccinated or not. If they chose not to be vaccinated, they faced being placed on unpaid leave or having their employment terminated. This potential harm is fundamentally related to employment. It is harm which an arbitrator has the tools to remedy. If the appellant were to prevail in the arbitration, an arbitrator could order reinstatement without loss of seniority and compensation for lost wages. There is no palpable and overriding error in the application judge’s conclusion that there was no remedial gap in the labour relations regime that warranted the exercise of the Superior Court’s residual jurisdiction.
[39] The application judge’s characterization of the harm is consistent with other trial level decisions considering requests for injunctive relief in relation to mandatory vaccination policies in both unionized and non-unionized workplaces: Wojdan v. Canada (Attorney General), 2021 FC 1341, at paras. 27 and 34-36 (appeal dismissed as moot: 2022 FCA 120); Lachance c. Procureur général du Québec, 2021 QCCS 4721, at paras. 137 and 144; Kotsopoulos v. North Bay General Hospital, [2002] O.J. No. 715 (S.C.), at paras. 16-18; Milka Cavic v. Canadian Union of Public Employees Union Local 905, 2022 CanLII 5015 (Ont. L.R.B.) at para. 43; Lavergne-Poitras v. Canada (Attorney General), 2021 FC 1232 at para. 7. See also Amalgamated Transit Union, Local 113 v. Toronto Transit Commission, 2017 ONSC 2078, 275 L.A.C. (4th) 187, at para. 79, for similar reasoning in the context of a mandatory drug and alcohol testing policy. . Taylor v. Hanley Hospitality Inc.
In Taylor v. Hanley Hospitality Inc. (Ont CA, 2022) the Court of Appeal considered some COVID-inspired employment leave changes (infectious disease emergency leave) to the Employment Standards Act:[6] On March 17, 2020, pursuant to s. 7.0.1(1) of the Emergency Management and Civil Protection Act, R.S.O. 1990, Ch. E.9 (“EMCPA”), the Ontario government declared a state of emergency in response to the world-wide COVID-19 pandemic. As a result of the declared emergency, under 7.0.2 of the EMCPA, the Lieutenant Governor in Council was broadly empowered to make such emergency orders that were “necessary and essential in the circumstances to prevent, reduce or mitigate serious harm to persons or substantial damage to property”. Numerous emergency measures were enacted and still continue.
[7] In issue in this appeal are the amendments to ss. 50.1 and 141 of the ESA and the provisions of O. Reg 228/20 made under the ESA that create a new category of leave under the ESA: the infectious disease emergency leave (“IDEL”). The Employment Standards Amendment Act (Infectious Disease Emergencies), 2020, S.O. 2020, c. 3 (“ESAA”) contained the amendments and was assented to on March 19, 2020. O. Reg. 228/20 was made under the ESA on May 28, 2020 and filed on May 29, 2020.
[8] Sections 50.1(1.1)(a) and (b) of the ESA prescribe the circumstances when an employee is entitled to an IDEL without pay if the employee will not be performing the duties of his or her position. Section 50.1(1.2) prescribes when an employee is entitled to a paid leave of absence and the employer’s obligations to provide pay if an employee is required to miss work for reasons associated with COVID-19. Section 50.1(1.3) provides that under s. 50.1(1.2), an employee is entitled to a total of three paid days of leave.
[9] Section 50.1(1.1)(a) deals with circumstances that prevent an employee from performing the duties of his or her position because of an emergency declared under section 7.0.1 of the EMCPA, an order made under section 7.0.2 of the EMCPA or the Health Protection and Promotion Act, because he or she is needed to provide care or assistance to a person designated under section 50.1(8), or for other prescribed reasons. Section 50.1(1.1)(b) focuses on reasons preventing an employee from performing the duties of his or her employment that are caused by or related to exposure to a designated infectious disease, such as being under medical investigation or treatment, quarantine, providing support to an affected individual, or travel restrictions. Other reasons include because of an order under section 22 or 35 of the Health Protection and Promotion Act that relates to the designated infectious disease, because of a direction from an employer in response to a concern that the employee may expose other individuals in the workplace to the designated infectious disease, or because of other prescribed reasons.
[10] In addition to the existing regulatory powers for carrying out the purposes of the ESA under section 141(1), the regulatory powers of the Lieutenant Governor in Council were amended and expanded in the ESAA to allow the Lieutenant Governor in Council to make broad transitional regulations, including:i. Section 141(2.0.3.3) which permits regulations “for any transitional matter that the Lieutenant Governor in Council considers necessary or advisable in connection with the implementation of the amendments made by the Employment Standards Amendment Act (Infectious Disease Emergencies), 2020”. Sections 141(2.0.3) to (2.0.3.5) also refer to a number of acts enacted pre and post pandemic under which the Lieutenant Governor in Council may regulate in connection with the implementation of the amendments of those acts: Fair Workplaces Better Jobs Act, 2017; Making Ontario Open for Business Act, 2018; Restoring Ontario’s Competitiveness Act, 2019; Employment Standards Amendment Act (Infectious Disease Emergencies), 2020; Covid-19 Putting Workers First Act, 2021; Working for Workers Act, 2021;
ii. Section 141(2.0.4) provides that in the event of a conflict between the ESA or its regulations, and a regulation made under sections 141(2.0.3) to (2.0.3.5), the latter, transitional regulations prevail;
iii. Section 141(2.1) that allows for regulations designating an infectious disease for the purpose of section 50.1 and respecting all aspects of the IDEL;
iv. Section 141(2.2) that stipulates that a regulation made under, among other subsections, (2.1), or a regulation prescribing a reason for the purposes of subclause 50.1(1.1)(a)(iv) may, among other things,(b) provide that an employee who does not perform the duties of his or her position because of the declared emergency and the prescribed reason, or because of the prescribed reason related to a designated infectious disease, as defined in section 50.1, is deemed to have taken leave beginning on the first day the employee does not perform the duties of his or her position on or after the date specified in the regulation. [11] O. Reg. 228/20, made under the ESA and subtitled, “Infectious Disease Emergency Leave”, for the purposes of s. 50.1 of the ESA designates COVID-19, among others, as an infectious disease. It then sets out the parameters of and entitlements to IDEL. These include when an employee is deemed to be on IDEL (s. 4); when an employee is not deemed to be on IDEL (s. 5); and when an employee, whose hours of work are temporarily reduced or eliminated by the employer, or whose wages are temporarily reduced by the employer, for reasons related to the designated infectious disease during the COVID-19 period, is not considered to be laid off (s. 6) or constructively dismissed (s. 7). Sections 5, 6 and 7 exempt an employee from the application of IDEL whose employment was terminated on or after March 1, 2020, or who was constructively dismissed or laid off for longer than the temporary lay-off period before May 29, 2020. Finally, s. 8 prohibits employees from bringing any complaint during the designated pandemic period.
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