There have been many developments in Canadian employment law recently and employers should be aware of three developments in particular.

  1. Court awards Significant Damages for the Manner of Termination

A recent decision out of British Columbia highlights the importance of the duty of good faith on employers in the course of terminations.  In Fobert v. MCRCI Medicinal Cannabis Resource Centre Inc., 2020 BCSC 2043,  25-year old  Ms. Fobert was terminated without cause from her entry-level position after 18 months of service. Ms. Fobert was awarded 8 weeks of notice as well as $25,000 in aggravated damages and $35,000 in punitive damages. In awarding aggravated damages, Justice Fleming found that the employer “significantly” breached their obligation of good faith and fair dealing towards Ms. Fobert by withholding unpaid wages and statutory severance when they were aware of their obligations and by their conduct in a termination meeting. Specifically, during a termination meeting, a company representative:

  • Made false and serious allegations of financial impropriety on Ms. Fobert’s part;
  • Stated that all other employees had signed off on their terminations without any severance;
  • Made it clear the company was willing to sue Ms. Fobert and would withstand being sued;
  • Offered her a total of $500 of severance;
  • Pressured her into accepting the offer immediately by telling her it would be revoked after the meeting and refused to put the offer in writing;
  • Commented that meeting over such a “minor financial matter” was not worth his time; and
  • Refused to answer a question about who she could contact to discuss the termination.

In awarding punitive damages, Justice Fleming cited the company’s conduct in the termination, as well as the fact that they made serious allegations against Ms. Fobert in their pleadings without leading any evidence about them at trial. Further, in withholding her unpaid wages and statutory severance, it was apparent the company was attempting to take advantage of Ms. Fobert’s financial vulnerability relative to the company.

While it is an extreme case, this decision serves as an important reminder to employers that, even where an employee’s reasonable notice period may be relatively short, there can be significant damages if the duty of good faith is not maintained throughout the termination process.

  1. Conflicting Decisions on whether an IDEL layoff is Constructive Dismissal

As outlined in our April Newsletter, the Ontario Superior Court of Justice in Coutinho v Ocular Health Centre, 2021 ONSC 3076, found that employees who had been temporarily laid off because of the COVID-19 pandemic were constructively dismissed at common law, notwithstanding that Ontario Regulation 228/20 stated that a temporary elimination of an employee’s hours of work for reasons related to the designated infectious disease does not constitute constructive dismissal.

Most recently, in Taylor v. Hanley Hospitality Inc., 2021 ONSC 3135, Justice Ferguson, also of the Ontario Superior Court of Justice, held that the Coutinho decision is wrong in law in part because it renders the legislation meaningless. Justice Ferguson found that all temporary layoffs related to COVID-19 are deemed to be IDELs and therefore the normal rights for statutory leaves are applicable and “any argument regarding the common law on layoffs has become inapplicable and irrelevant.”

It is likely that either, if not both, of these decisions will be appealed given the clearly opposing approaches taken by the Ontario Superior Court. Employers are advised to keep an eye out for our future newsletters as we will be watching closely for clarity on this issue.

  1. New ESA Poster

Employers are reminded that the Ministry of Labour, Training and Skills Development released a new poster that must be provided to all employees within 30 days of their date of hire. The poster describes the employee’s rights and requirements under the Employment Standards Act, 2000. It no longer needs to be posted in the workplace.