Benke v Loblaw Companies Limited

In Benke v Loblaw Companies Limited, the Alberta Court of Queen’s Bench held that Loblaw Companies Limited did not constructively dismiss one of its employees by placing him on unpaid leave for failing to comply with its mandatory mask policy, but rather that the employee resigned.

The Facts

In August 2020, Loblaw Companies Limited (“Loblaw”) instituted a mandatory mask policy in all of its stores across Canada in an effort to mitigate the transmission of COVID-19 (the “Mask Policy”). The Mask Policy applied equally to customers and employees and provided exemptions for, among others, people with an underlying medical condition(s) that inhibits their ability to wear a mask.

Mr. Benke, an employee of Loblaw, sought an exemption from the Mask Policy. Mr. Benke had his doctor fill out a medical exemption request form and submitted it to Loblaw. However, the form merely indicated that Mr. Benke was unable to wear a face mask; it did not state that his inability to wear a face mask was due to a medical condition. Accordingly, Mr. Benke failed to qualify for an exemption under the Mask Policy.

Loblaw placed Mr. Benke on indefinite unpaid leave because he refused to wear a mask in stores without medical justification and thereby did not comply with the Mask Policy. Mr. Benke brought a claim for constructive dismissal, seeking damages in lieu of notice.

The Court’s Decision and Reasoning

The Court explained that in order to determine whether an employee has been constructively dismissed, it must determine: (i) whether the employer has imposed unilateral substantial changes that constitute a breach of the employment contract; and (ii) if a reasonable person in the employee’s position would have felt that the breach substantially altered an essential term of the employment contract. The Court held that Loblaw’s decision to place Mr. Benke on unpaid leave due to his failure to comply with the Mask Policy did not amount to constructive dismissal. The Court gave the following reasons to support its decision:

1. Loblaw had no obligation to accommodate Mr. Benke because there was no medical justification for a mask exemption.
2. Loblaw’s imposition of the Mask Policy was not a substantial change to the employment relationship and as such did not breach the employment contract. The Court explained that Mr. Benke’s job responsibilities did not change; the only thing that was different was that he had to wear a mask by reason of the Mask Policy. The Court further explained that, the Mask Policy, though imposed by Loblaw, was co-extensive with legal requirements imposed by municipalities and public health authorities.
3. While unpaid leave was a substantial change to Mr. Benke’s employment relationship, it was not a breach of the employment agreement because the essence of the employment bargain is that the employee will work and the employer will pay. The Court explained that since Mr. Benke was not working by reason of a voluntary choice that he made, a choice not to comply with the Mask Policy, it was reasonable for Loblaw to not pay him.
4. Mr. Benke’s refusal to abide by the Mask Policy was a repudiation of his employment agreement. Loblaw, however, did not accept the repudiation and instead put him on unpaid leave.

The Court held that Mr. Benke’s inability to work was the consequence of a voluntary choice that he made. Therefore, any losses suffered as a result are not the responsibility of Loblaw.

Takeaways for Employers

This case demonstrates that certain policies, such as a mask policy implemented in light of COVID-19, will not be considered unilateral substantial changes that constitute a breach of the employment contract and therefore will not be grounds for a valid constructive dismissal claim. This case also suggests that where an employee refuses to comply with a mask policy, the employer can treat that refusal as a repudiation of the employment contract.

If you have any questions regarding workplace/employment contracts please reach out to Barbara Green via email at bgreen@robapp.com