McLennan Ross Update for Wednesday

By McLennan Ross Labour and Employment Team

What we are seeing 

• As stated in our blog yesterday, Ontario and Quebec implemented a lock-down of non-essential workplaces, but with a broad list of permitted “essential” businesses. So far, no other provinces have taken the same action. According to news reports, the Alberta government could soon take similar action, with the list of what workplaces will be declared essential is currently being developed by a cross-ministry team with officials from health, labour, energy and municipal affairs under the guidance of the Provincial Operations Centre. We discuss the impact of such an order on employment relationships below.

 What we are hearing

• The Government has not determined that it will need to limit business activity to “essential services,” but it is taking steps to prepare for that possibility. We hope that will not be necessary. We expect that if an essential services order is given, the list of permitted “essential” businesses will be broad.

• Employers are feeling the stress of continuing to operate and thereby provide income to employees, but then being criticized for allowing employees to work when they do not subjectively feel safe. Employers with large workforces working at one location are then further conflicted by privacy considerations arising from the implementation of testing prior to employees being allowed on the worksite. If the employer has a large number of employees arriving at the same time to start a shift, and the employer has decided to take the temperature for each employee and not allow those employees with an elevated temperature to work that day, logistically how can the employer be expected by its employees to both (a) conduct the test in a manner that ensures accurate results and ensures that no one who may have the COVID-19 virus is allowed to work yet (b) respect the privacy rights of the employee testing negatively when that employee is publicly prevented from entering the worksite. If employers are considering implementing taking temperatures, we recommend that it should be only one part of a larger overall program to deal with COVID-19 safety concerns in the workplace, with different elements. In addition, the employer must consider how best to protect the privacy of all involved and implement reasonable measures to do so. We can assist you if you are looking at developing such programs.

 What we are saying

•  As stated in our blog yesterday, Ontario and Quebec implemented a lock-down of non-essential workplaces. Alberta is considering the possible need to do the same. While the Government of Alberta is mindful of not unnecessarily shutting down businesses (and not hampering critical services by restraining the businesses that supply them), now is the time to communicate to MLAs, Government Departments, and Ministers your views about any essential services issues and why your business should be included on any list of essential activities.
• Should Alberta indeed follow Ontario and Quebec’s lead, we have been asked by clients whether such a declaration would allow employers to now claim frustration of contract, end employment relationships, and not be legally obligated to provide notice or pay in lieu of notice to their former employees:

• Section 55(2)(h) of the Employment Standards Code provides that termination notice is not required if the contract of employment is or has become impossible for the employer to perform by reason of unforeseeable or unpreventable causes beyond the control of the employer. If the employer’s business is one that cannot be performed remotely, such as a restaurant, store or other similar business, a direction to lock-down the workplace for an indefinite period of time would appear to qualify.
• The Employment Standards Code explicitly states that nothing in it affects any civil remedy of an employee. Reasonable notice or pay in lieu of notice at common law may still be available to employees terminated under section 55(2)(h) unless a court finds that the employment relationship has been “frustrated” due to it becoming impossible to perform due to circumstances beyond the control of either the employer or the employee. Whereas a business making the decision to cull its workforce to endure economic difficulties due to the pandemic was unlikely to qualify as frustration, it becomes much more arguable if that business is forced to cease operations, either temporarily or permanently, due to a governmental order prohibiting that business from opening.
• Although difficult to predict at this time as we are still in early days of this pandemic, we can foresee the courts applying a superficial analysis: if a business ceases operations and never reopens, there was frustration of contract; if the business reopens and starts rehiring employees, a frustration argument will not be available in response to wrongful dismissal claims advanced by former employees who are not rehired.
• Frustration of contract is a fact-specific assessment that will depend on the circumstances of each case.

• Some clients are content to have any outstanding litigation paused while the pandemic and resulting state of emergency limits or eliminates court resources. Others, while being mindful of not being perceived as trying to take advantage of the situation, are exploring settlement as the indefinite delay in matters being set for trial could lead parties to be more reasonable in negotiations in order to achieve a resolution of a dispute. A third option is to pursue resolution through private arbitration, even if already started as traditional litigation. A number of arbitrators, including Jim Lebo, Q.C. and Peter Major, Q.C. from McLennan Ross LLP, are still hearing matters and are doing so remotely or based on written argument alone. Private arbitrators can also be retained on a limited basis to resolve interim procedural issues or discrete issues in existing court actions to allow the litigation to continue to move forward but preserve the parties’ desire for the claim to be ultimately resolved by way of a traditional trial.