In Benke v Loblaw Companies Limited, the Alberta Court of Queen's Bench held that the employer did not constructively dismiss one of their employees who had been placed on unpaid leave for failing to comply with a mandatory mask policy, but rather that the employee resigned without any recourse.

The Facts

In August 2020, Loblaw Companies Limited ("Loblaw"), like many businesses at that time, mandated the wearing of face masks in its stores in an effort to mitigate the transmission of COVID-19 (the "Mask Policy"). The Mask Policy, applied to both patrons and employees and provided standard exemptions, including for (i) persons with an underlying medical condition inhibiting their ability to wear a mask and (ii) persons who are reasonably accommodated by not wearing a mask pursuant to human rights legislation.

Mr. Benke, a long-term employee of Loblaw who was required to visit various Loblaw stores in Alberta and British Columbia, sought an exemption from the Mask Policy. In addition to a medical exemption request form, he submitted two letters from his physician, which all stated that he was unable to wear a face mask. However, these documents did not state that his inability to wear a mask was due to any medical condition or disability. Accordingly, Mr. Benke failed to qualify for an exemption under the Mask Policy.

When Mr. Benke refused to comply with the Mask Policy without a valid medical exemption under the Mask Policy, Loblaw placed him on an indefinite unpaid leave. Mr. Benke claimed that he was constructively dismissed and entitled to compensation in lieu of notice of termination.

The Decision

The Court confirmed that a constructive dismissal occurs where (i) an employer imposes a unilateral substantial change constituting a breach of the employment contract and (ii) a reasonable person in the employee's position would have felt such breach substantially altered an essential term of their employment. The Court dismissed Mr. Benke's claim, finding that Loblaw's implementation of the Mask Policy and its subsequent decision to place Mr. Benke on an unpaid leave did not amount to a constructive dismissal. The following factors supported the Court's decision:

  • there was no obligation to accommodate Mr. Benke since he could not, even at the summary trial, adduce evidence of a medical condition or disability that prevented him from wearing a mask;
  • the imposition of the Mask Policy by Loblaw was not a substantial change to the employment relationship entitling him to claim that he was constructively dismissed. The Mask Policy was coextensive with legal requirements imposed by municipalities (such as the City of Calgary mask bylaw) and public health authorities. The Mask Policy was also similar to other mask policies that had been held to be reasonable by other decision makers, including the Human Rights Tribunal of Alberta;
  • Benke's refusal to abide by the Mask Policy was a repudiation of his employment agreement. However, Loblaw, did not accept the repudiation, instead electing to place him on unpaid leave; and
  • while being placed on an unpaid leave was a substantial change to Mr. Benke's employment relationship, it was not a breach of his employment agreement. The Court reasoned that the essence of the employment relationship is that an employee works for an employer in exchange for pay, but since Mr. Benke was not working due to a choice that he made to not comply with the Mask Policy, it was reasonable for Loblaw to not pay Mr. Benke.

Although Mr. Benke did not expressly communicate a resignation to Loblaw and remained an employee in Loblaw's system, Mr. Benke had also obtained alternate employment, returned his company vehicle, and commenced a lawsuit and human rights complaint against Loblaw. Accordingly, the Court determined that Mr. Benke had objectively resigned his employment. Therefore, any losses that Mr. Benke suffered were self-inflicted and not the responsibility of Loblaw.

Significance of the Decision and Takeaways for Employers

This is the first Alberta court decision addressing an employee being placed on unpaid leave for failing to comply with a mask policy prompted by the COVID-19 pandemic. This is a welcome decision for employers, as it provides clear authority that such policies, in the right context, will be reasonable and not be considered a unilateral change in the employment relationship precipitating a claim for constructive dismissal. Further, the decision suggests that once an employee has refused to comply with a mask policy, the employer may be able to treat the refusal as an immediate repudiation of the employment contract, with no obligation to prolong the employment relationship by placing the employee on an unpaid leave or taking other disciplinary measures.

It remains to be seen whether the courts will reach a similar conclusion with respect to employees who refuse to comply with mandatory vaccination policies without a valid medical or religious exemption. Although vaccination policies have generally been upheld in unionized settings, they are understandably more invasive than mask policies and their reasonableness is heavily context-driven. Accordingly, employers should remain cautious in managing employee non-compliance of mandatory vaccination policies.

We will continue to monitor developments respecting COVID-19 in the workplace and provide any pertinent updates as they become available. Employers with specific questions regarding their approach on these matters can seek guidance from experienced legal counsel at Stikeman Elliott LLP.

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