Looking back at 2020 and the employment law lessons learned ⋆ LegalMattersCanada

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‘Significant court decisions’

“Because of that, it is not surprising that some may have overlooked everything else that went on in 2020,” Rudner adds. “We had a year where the courts were largely closed and even when they were open, they were really operating on a reduced capacity. Yet we had a dramatic number of significant court decisions affecting employment law.”

The virus forced a virtual shutdown of the entire planet, yet Rudner’s firm was able to serve clients without much interruption.

“It could be a challenge because things changed so rapidly, but we were fortunate because we are cloud-based and paperless. It was easy for us to pivot and work remotely. Being tech-savvy, it wasn’t as challenging for me as it might have been for others,” he says. “For my mediation practice I was able to quickly shift to virtual sessions and they have been extremely successful.

“Once we got over the initial shock and grasped what was going on, we realized that we needed to get information out to clients because people were struggling. We put together a COVID-19 resource centre on our website and scrambled to get as much advice out as we could.”

Caught off guard

He says the pandemic caught virtually everyone in the business world off guard and confirmed something he has long known: “Most people don’t think of the employment relationship as a legal relationship.”

“Many just don’t have a grip on the laws that govern the employment relationship,” Rudner says. “People went through things they have never experienced before and in many cases had to respond virtually overnight.”

Of course, mistakes were made and people “got themselves into trouble because they didn’t think of the legal implications of what they were doing,” he says.

“Most business owners would never go to their landlord and say, ‘I know my lease is for $10,000 a month for rent, but as of now I am going to pay half.’ They wouldn’t have the nerve because they have a contractual agreement,” says Rudner. “They might ask for a break in the rent, but they wouldn’t presume to impose that on the landlord. Yet the same business owners would go to their staff and tell them they are not going to be able to work and are not going to be paid. And they don’t seem to realize there’s anything wrong with that.”

He says a myriad of issues arose out of the shutdown resulting in “dramatic impacts on workplaces.”

“There have been layoffs, there have been reductions in hours, reduction in pay, recalls, employers struggling with how to ensure they can provide a safe working environment, individuals not understanding whether they have to return to the workplace or whether they are allowed to refuse to work,” says Rudner. “All of these issues that we rarely discus have come to the fore s.”

Overnight change

The employment world changed overnight and people tried to find answers, sometimes in the wrong places, he says.

“There’s a wealth of information you can access, especially from the internet. The challenge is getting the correct information,” Rudner notes. “It is great when people contact us and they have done a little research. If they have an understanding of the law, we can just build upon that.

“A problem arises when people listen to a well-meaning friend or relative or access websites that are not accurate,” he adds. “Often people are steered in the wrong direction, so we have to explain how the law really works and the options available to them.”

Rudner says businesses had difficulty understanding their rights and responsibilities when it came to cutting staff during the shutdown.

“In some contexts, employers overestimated their rights. For example, they thought they were safe in unilaterally imposing layoffs. Many made a big mistake by not getting employees to agree,” he says. “We helped clients through that process. By getting it in writing they were able to limit liability for constructive dismissal.”

Rudner says it’s not surprising errors were made in March and April when “businesses that lost a vast majority of their revenue virtually overnight had to search for answers.”

‘More mistakes followed’

“What I found more unexpected is that when we started to shift to the back-to-business phase more mistakes followed,” he says. “Some employers underestimated their rights. We saw a lot of situations where businesses called people back to work and employees essentially refused. Employers didn’t understand that they could insist”

Rudner explains that it is within an employer’s rights to insist employees return to work.

“Some people seemed to think they had a choice,” he says. “However, you can’t insist on working from home even if you are just as productive. It is ultimately the employer’s choice of where you work. But there’s just so much misunderstanding about what people’s rights and obligations are that we still see a lot of missteps.”

Lost in all the turmoil of the pandemic was a year that included some consequential court rulings, Rudner says.

“In terms of employment law, there is a trilogy of decisions that come to mind that impacted termination and entitlements,” he says.

Waksdale and Swegon North America Inc. is a wrongful dismissal claim which saw the plaintiff successfully argue that his employment contract was not enforceable because the termination for cause provision was void.

In its decision, the Ontario Court of Appeal ruled that “a termination clause must be interpreted as a whole and not on a piecemeal basis.”

‘Dramatic implications’

“This ruling has dramatic implications for the enforceability of termination clauses,” Rudner says. “I see a lot of termination clauses in my role as an employment lawyer and a mediator. The majority of them are now likely unenforceable because of that case. There are many employers who are in for a real surprise.”

In Matthews v. Ocean Nutrition Canada Ltd. the Supreme Court of Canada awarded an employee more than $1 million in a incentive payout from the sale of his former company. The bonus had come due after the plaintiff had been constructively dismissed but during what was ruled to be his notice period.

“This was a huge victory for employees. On the one hand, the court confirmed that by default, if you are terminated, you are entitled to all compensation and benefits you would have received if you were allowed to work through the notice period,” Rudner says.“That’s nothing new, but then they confirmed that unless the contract very clearly and almost perfectly displaces the default, the employee will be entitled to post-termination compensation such as long-term incentive plan payments.”

In the third case in the “trilogy,” Battiston v. Microsoft Canada Inc, Ontario Superior Court found that even where there is clear wording removing an employee’s entitlement to post-dismissal compensation, it may not be enforced if the employer failed to bring the provision to his attention.

Future impact

“What this case says is that even if you have a perfectly worded clause which would otherwise prevent the employee from collecting their post-termination compensation, unless it was explicitly brought to their attention it may not be enforceable,” Rudner says. “I expect that those three judgments will continue to have a tremendous impact on post-termination entitlements.”

He says he expects the aftershocks of 2020 will be felt for some time.

“The events of this year have had dramatic implications on how we work and the nature of where we do that work,” Rudner says. “We are seeing people working from home and while it is unclear if that is going to continue, it seems unlikely that we will return to the previous status quo. People are going to have to adapt to this new reality, which has social and legal implications.

“We are going to look back at 2020 as a year of tremendous change, and the workplace is not going to be the same as it was before. That will have significant employment law implications.”