Jury out on severance for fired unvaccinated employees

Over the next few months, thousands of workers could be laid off for not complying with their workplace’s mandatory vaccination policies, and many will receive Employment Insurance after their termination.

That’s because some lawyers are recommending that employers terminate unvaccinated employees without cause, meaning they would receive severance and be EI eligible, instead of firing them outright.

But can employers fire employees who break vaccine policies and not give them severance?

The jury is, quite literally, still out.

Employers don’t yet know whether they’re legally allowed to terminate someone with cause for not following their new vaccine policy, said Marty Rabinovitch, partner at Devry Smith Frank.

Terminating with cause means the employee has done something to violate the terms of their employment, and means the employee is not eligible for severance pay. It also often means they can’t get EI.

It will be months, if not a year or more, before there are any court decisions to create a precedent. But Rabinovitch believes this issue will boil down to whether the employer’s vaccination policy is reasonable under the circumstances.

For example, it will depend on what kind of work the employees do, and who they work with. Rabinovitch thinks that at a workplace that deals with vulnerable populations, the employer has a better chance of termination with cause being upheld by the courts, than — for example — accountants working from home. For those workers, a widespread mandatory vaccination policy will be harder to uphold, he said.

Jon Pinkus, partner at Samfiru Tumarkin, agrees. Other than workplaces where it’s the law for employees to get vaccinated, as in Ontario long-termcare homes, Pinkus suspects that most employers won’t have legal standing to terminate employees with cause — especially if their job doesn’t involve a lot of in-person work or work with vulnerable populations.

But even if it does involve the latter, he still isn’t sure the courts will side with the employer, and thinks that is a “dangerous assumption” to make.

Pinkus recommends that employers prepare to terminate without cause and pay severance.

However, Howard Levitt, senior partner at Levitt Sheikh, disagrees.

Assuming the vaccination policy is reasonable, he thinks the courts will come down in favour of employers terminating employees with cause.

Safety trumps privacy, said Levitt, and this is an unprecedented circumstance with a clear solution: widespread vaccination.

That’s why he believes the courts will side with public health.

However, Levitt expects a lot of employers will do what Pinkus recommends: terminate employees without cause and pay them severance, just in case. He calls this an expensive bet, though he notes that if it’s just one or two employees, it may be the simpler route for an employer to take.

The fact that it’s the law in Ontario for long-term-carehome employees to be vaccinated will help with the legal argument for other employers in a similar position, such as those in health care or those who work with vulnerable people, said Levitt.

“Context is everything,” he said.

Levitt is aware his opinion on this is risky, since there isn’t a precedent yet, which is why he’s confident in his prediction — but not promising anything to employers or employees.

He recommends that employees bide their time after submitting a claim to see where the courts land.

As for employers, he thinks for many it will be worth it to assume that if their policy is reasonable, they can terminate with cause — and if the courts prove them wrong, they will just pay out that severance at a later date.

Rabinovitch expects a lot of cases in the coming months — some wrongful dismissals by employees who have been terminated, and some constructive dismissals by those who don’t want to follow their employer’s vaccination policy.

Pinkus also expects a lot of court cases related to vaccine policies.

“Litigation feeds on uncertainty,” he said, and there is no certainty yet whether vaccination policies can be treated as essential terms of employment in most workplaces.

Levitt doesn’t agree, however. He thinks the growing number of workplace vaccination policies will convince more people to get vaccinated, and that the number of people who take the issue to the courts will be slim.

There is a wide variety of vaccine policies, Rabinovitch noted. Some offer exceptions for unvaccinated employees, such as working from home or regular testing. Others are stricter, and will only offer exceptions for valid exemptions under the human rights code.

For an employee who has been terminated with cause and is trying to access EI, decisions about income support can be appealed, often with success, said Pinkus. However, these decisions may also be affected by eventual court cases, he added.

Rabinovitch said EI eligibility comes down to the reason for termination. If they were terminated without cause, they will be eligible for income support, though they will also get severance from their former employer.

But if they were terminated with cause, for misconduct, such as refusing to follow a policy, they can’t get severance or EI.

A spokesperson for Employment and Social Development Canada said each EI application is assessed on a case-bycase basis, which may include reaching out to the employer or employee for more information. But generally speaking, any employee terminated for misconduct, such as not complying with a mandatory vaccination policy, would not be eligible for EI unless they have a valid exemption, said the spokesperson in an email.

Patrick Stepanian, legal manager at HR consulting firm Peninsula Canada, said when crafting workplace vaccination policies, employers need to ensure there are accommodations for employees with valid exemptions, as well as a reasonable deadline to ensure hesitant employees are given time to do their research and make a decision.

Most employers, when faced with one or two employees who won’t get vaccinated, will “bite the bullet” and terminate them without cause, preferring to pay severance than risk a legal battle, said Stepanian.

With-cause termination has a really high threshold, he said, and should be approached with caution.

He noted that if an employee faked their vaccine certificate and was found out, that would be cause for termination.

As well, if an employer offers reasonable alternatives that the employee refuses to follow, that would make with-cause termination easier to justify, said Stepanian.

Many employers are anxious about their vaccine policies, he said, but as more and more large employers announce their policies, smaller companies are following suit with more confidence.

Among the large companies that have announced workplace vaccination policies are GM Canada, Sun Life, RBC, and Porter Airlines. Public employers including the federal government and the City of Toronto have done the same.

Some experts and advocates have asked the provincial government to enact a wider vaccine mandate in order to remove legal responsibility from individual employers.

There is no certainty yet whether vaccination policies can be treated as essential terms of employment in most workplaces