Although COVID-19 safety measures are no longer mandatory, many employers still face claims from employees who were dismissed for refusing to comply with a vaccination policy. We are seeing a growing body of case law which addresses the issue of wrongful dismissal in the context of vaccination policies as many of these cases work their way through litigation.
In Croke v VuPoint Systems Ltd. [Croke], the Ontario Superior Court of Justice (the “Court”) held that an employee’s failure to comply with his employer’s vaccination policy amounted to a frustration of contract. This allowed the employer to treat the employment contract as if it had ended and therefore had no obligation to provide the employee with notice of termination.
Background
The Employee was a systems technician for the VuPoint Systems Ltd. The employer provided services on behalf of Bell Canada (“Bell”), and Bell generated more than 99% of the employer’s revenue. During his employment, the employee only provided installation services to Bell.
On or around September 2021, Bell informed the employer that it would require all workers who provided installation services to receive two doses of a COVID-19 vaccine. The employer subsequently adopted a mandatory vaccination policy (the “Policy”) which required installers to be vaccinated against COVID-19 and provide proof of vaccination. The Policy indicated that non-compliant installers would be “prohibited from performing work for certain customers (including Bell)” and “may not receive the assignment of any jobs.”
The employee decided not to become vaccinated, and the employer subsequently advised the employee that he would be dismissed as of October 12, 2021. In response to the employer’s decision, the employee sent a letter to his supervisor to state that he refused to disclose his vaccination status. The employee subsequently filed a wrongful dismissal action against the Employer.
Decision
The Court held that the employee was not entitled to any damages for wrongful dismissal, but acknowledged that the employer paid the employee the two weeks’ notice and any amounts owed, including severance, under the Canada Labour Code [CLC].
The Court found that since over 99% of the employer’s business came from Bell, it was required to comply with and enforce Bell’s policies pursuant to the supply agreement, including Bell’s vaccination policy. The employer’s implementation of its vaccination policy was characterized by the Court as a “radical change to the [Employee’s] employment contract”, and the employee was subsequently unable to perform his duties while he remained unvaccinated. The Court acknowledged that this change to the employment contract would be in place for the foreseeable future, and ultimately held that Bell’s vaccination policy frustrated the employee’s employment contract with the employer.
Takeaways for Employers
The circumstances in the Croke decision are unique because it involved a situation where an employee was unable to perform the duties of his position due to the fact that his employer received a significant amount of its business from a third-party and subsequently complied with the third-party’s vaccination policy. Additionally, the employee only provided services to the third-party. Therefore, the employee’s refusal to comply with the vaccination policy in order to perform his duties amounted to a frustration of his employment contract and ultimately absolved the employer from any obligation to pay the employee notice at common law.
Employers should be mindful that an employee’s refusal to comply with a vaccination policy will not always mean that there is a frustration of the employment contract. Whether a Court would ultimately decide that a situation meets the threshold for frustration will depend on the specific circumstances. Specifically, a Court will look at whether a certain situation was a “supervening event and radical change to the employment contract [that is] in place for the foreseeable future…”.
In other circumstances where an employer’s decision to implement a mandatory vaccination policy was motivated by health and safety or other considerations, but not in response to a requirement that was effectively imposed on it by a client for whom its employees could not perform services if they did not become vaccinated, the court likely would not have found the contract to have been frustrated. Under these circumstances, employees would be entitled to notice of termination unless there was just cause for termination. Currently, there is no case law which addresses this issue in the context of vaccination policies, or which addresses the question of whether, in circumstances where there is no cause for dismissal, an employee’s refusal to become vaccinated would impact the length of their notice period.
We will continue to monitor the further developments in case law regarding vaccination policies and provide updates on developments that are relevant for employers.
