First Alberta Decision Out: Constructive Dismissal For Mask Policy Refusal?

In Benke v. Loblaw Companies Limited, the Alberta Court of Queen's Bench held that the employee was not constructively dismissed when placed on an indefinite unpaid leave for failing to comply with a mandatory mask policy.

This decision suggests that when an employee refused to comply with a mandatory mask policy during the COVID-19 pandemic, it was reasonable for the employer to have treated the refusal as a repudiation of the employment agreement or placed the employee on an unpaid leave.

Facts

In August 2020, Loblaw Companies Limited ("Loblaw") implemented a policy mandating face masks in its stores to mitigate the transmission of the COVID-19 virus (the "Mask Policy"). The Mask Policy was implemented shortly after the City of Calgary passed a bylaw mandating face masks in indoor public places.

The employee was a Customer Experience Specialist, and visiting stores in Alberta and British Columbia was essential to his job duties.

The employee sought an exemption to the Mask Policy. He submitted a medical exemption request form and two letters from his physician. However, these documents did not state that his inability to wear a face mask was due to a medical condition or disability. The employee also admitted that the exception request was not due to an illness.

The employee refused to comply with the Mask Policy. Instead of terminating the employee, Loblaw placed him on an indefinite unpaid leave. The employee claimed that he was constructively dismissed and entitled to damages in lieu of notice of termination.

Decision

The Court dismissed the employee's claim, finding that the Mask Policy and Loblaw's decision to place the employee on an indefinite unpaid leave did not amount to a constructive dismissal.

The Court confirmed that a constructive dismissal occurs where:

1. an employer has imposed a unilateral substantial change that constitutes a breach of the employment agreement, and
2. if a reasonable person in the employee's position would have felt that the breach substantially altered an essential term of the employment agreement.

First, the Court held that there was no obligation to accommodate the employee. Loblaw had accommodated the employee in the past by assigning him different job duties and allowing him to work from home. The employee argued that he should have been permitted to work from home or assigned other duties instead of being placed on an unpaid leave. The Court disagreed. The Court held that there was no duty to accommodate the employee in the circumstances since he did not have a disability or medical condition.

Second, the Court held that the Mask Policy was not a substantial change that constituted a breach of the employment agreement. The Court reasoned that the Mask Policy was coextensive with legal requirements imposed by municipalities and public health authorities (i.e., the City of Calgary's mask bylaw). The Mask Policy was also similar to other mask policies that were found to be reasonable by other decision-makers, including by the Alberta Human Rights Tribunal in Dickson v. Costco Wholesale Canada Ltd, 2022 AHRC 40.

By refusing to comply with the Mask Policy, the Court held that it was the employee who repudiated the employment agreement. However, Loblaw did not accept the repudiation and instead elected to place the employee on unpaid leave.

The Court held that placing the employee on an unpaid leave was a substantial change, but it did not constitute a breach of the employment agreement. The Court reasoned that the essence of the employment relationship is that an employee works for an employer in exchange for pay. Since the employee was not working due to his choice not to comply with the Mask Policy, it was reasonable for Loblaw not to pay him.

Despite Loblaw continuing to show the employee in their records as being on an unpaid leave, the Court held that there can be no doubt that the employee resigned. The Court was able to draw this conclusion based on the fact that the employee returned his company vehicle, filed a human rights complaint, commenced the constructive dismissal claim, and obtained full-time employment with a different employer.

As a consequence, the Court dismissed the claim and awarded Loblaw costs.

Takeaways

This is a welcome decision for employers who implemented similar policies. It suggests that it was reasonable for an employer to have treated an employee's refusal to comply with a mandatory mask policy during the COVID-19 pandemic as a repudiation of the employment agreement or to place the employee on an unpaid leave.

It remains to be seen whether the courts will reach a similar conclusion with respect to mandatory vaccination policies without a medical or religious exemption.

This decision also highlights that an employee is not entitled to accommodation unless they have a disability or other ground provided under the Alberta Human Rights Act, RSA 2000, c A-25.5.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr Lee Carter
Field LLP
400 - 444 7 AVE SW
Calgary
CANADA
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URL: www.fieldlaw.com

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