Court decides in favour of employers in COVID constructive dismissal claim
A recent court decision by the Alberta Court of Justice is a significant one for employers that placed employees on unpaid leave for failing to meet vaccination policies during the COVID pandemic.
It was decided that when an employee is put on unpaid leave because of their refusal to be vaccinated, they do not have grounds to sue for constructive dismissal.
Constructive dismissal is when an employee is not directly fired but is forced to either resign or to comply with fundamental changes to their working conditions, including drastic pay cuts or change in duties.
The decision is only the second civil court decision to assess the matter, according to Fasken Martineau DuMoulin lawyer Bruce Graham.
And the speed with which the judge decided may be an indication that there are many more such cases in the works, he said. Many employers resorted to putting employees on unpaid leave who weren’t complying with mandatory vaccination policies.
“A lot of people's assumptions about what was permitted and what was not permitted got turned upside down,” said Graham. “Everyone was having to assess and reassess constantly. It was a very interesting time in employment law and a very busy time for a lot of employment lawyers.”
Vaccination policy refusal reasonable cause for unpaid leave during COVID
The plaintiff had worked as a server for the employer, a restaurant, for over 13 years at the time of the unpaid leave. She worked roughly 32 hours per week, made $15 per hour plus 4 – 5 weeks of paid vacation per year, and participated in the employer’s benefits plan. She had already been temporarily laid off three times during the course of the pandemic, which was not an issue.
However, things changed during the fourth wave of the COVID-19 pandemic, when in September 2021 the government of Alberta announced the province was in a state of emergency, and the employer was allowed to stay open according to a “Restrictions Exemption Program”.
The employer introduced a mandatory workplace policy that said all employees must be vaccinated or be placed on unpaid leave of absence.
The server did not get vaccinated and did not offer any medical or religious reason that could have granted her an accommodation; according to the court decision, she confirmed in a documented meeting that “she had read the policy and did not agree with it. She advised that she was not vaccinated and was not going to be vaccinated in the future. The plaintiff was then reminded by the defendant’s manager of the consequences of not getting vaccinated… The meeting was not disciplinary in nature but rather, for information purposes only.”
After a second, similar documented meeting, on Oct. 4, 2021, the restaurant placed the employee on unpaid leave of absence. On Nov. 15, 2021, the plaintiff’s lawyer sent a letter to the employer with a Civil Claim that the employee had been constructively dismissed.
Interestingly, Graham pointed out, the judge in the case viewed that action as a resignation, although it was not the reason the court ruled against her.
“The evidence of the employer is that they had every intention of bringing this employee back, either because she complied with the policy, or because health recommendations changed from the government,” said Graham. “Eventually they did try to invite her back to work, and so the employer clearly was not trying to end the employment relationship.”
Best practices for HR to avoid constructive dismissal claims
This court decision is specific to COVID-19 and unlikely to be repeated without similarly extraneous circumstances, meaning it is still important for HR to consider carefully when placing an employee on unpaid leave of absence.
Unpaid leave of absence must be proven to be necessary by the employer in order to be valid, said Graham.
“To avoid litigation in a constructive dismissal context, you have to consider whether the change is unilateral and fundamental,” he said, explaining that the best way to do this is by obtaining the consent of the employee, and assessing if the change to the employee’s situation is fundamental.
“There's a difference between slashing someone's compensation versus changing job title and a reporting structure,” said Graham.
“You need to sit down and look at, are these changes significant, and could this be fundamental, to bring us into the realm where a constructive dismissal claim is possible, and when you're doing that analysis, we'd simply recommend doing the due diligence on the employer side and obviously obtaining legal advice.”