Over the past two years, employers have been faced with the difficult task of maintaining a safe work environment during the COVID-19 pandemic, as well as navigating murky waters when deciding how to respond to employees who choose not to comply with vaccination and masking requirements. A British Columbia arbitrator has provided insight as to when termination of an employee who refuses to comply COVID-19 policies may be appropriate.

Fraser Health Authority v British Columbia General Employees’ Union is the most recent BC arbitration decision to consider the appropriate employer response to employees who refuse to comply with COVID-19 vaccination policies. In Fraser, the Fraser Health Authority (“FHA”) implemented a mandatory vaccination policy (the “Policy”) pursuant to an order issued on October 14, 2021 by British Columbia’s Provincial Health Officer (“PHO”) requiring all health employees to be vaccinated against COVID-19 (the “Order”), unless determined by the PHO to be exempt on narrow medical grounds. On November 25, 2021, FHA terminated the employment of Lori Capozzi, a substance abuse counsellor, for refusing to be vaccinated.

This case was not about the reasonableness of the Policy generally, but whether FHA had just and reasonable cause to terminate the Grievor’s employment. Ms. Capozzi and the British Columbia General Employees’ Union (the “Union”) asserted that reasonable alternatives to termination existed, such as unpaid leave of absence (although the Union did not specify the length of leave it considered appropriate), and that termination of employment was not justified in the circumstances. FHA argued that Ms. Capozzi’s employment was properly terminated for just cause, as she was ineligible to work under the Order.

The arbitrator found that FHA was “not required to place the Grievor on a leave of absence of indefinite duration” and dismissed the grievance. Ms. Capozzi had received multiple notifications regarding the vaccination requirement and was aware of the consequences for failing to be vaccinated. FHA had made considerable efforts to meet with all employees who would be ineligible to work under the Order and discuss their personal circumstances. However, Ms. Capozzi informed FHA that she did not ever intend to be vaccinated. While the Order did not mandate termination for unvaccinated employees, unlike some other PHO orders, it had no end date, and the PHO had made public statements suggesting that it would be in place indefinitely. The arbitrator found that compelling operational reasons meant that no lesser alternative to termination of employment was reasonably available.

Fraser contrasts to the earlier arbitration decision of BC Hydro and Power Authority v International Brotherhood of Electrical Workers, Local 258, in which the arbitrator found that termination of employment was not a reasonable response to non-compliance with a COVID-19 vaccination policy.

The policy at issue in BC Hydro required all employees to be vaccinated; accommodation was only provided for employees that could not become vaccinated for reasons related to protected grounds under BC’s Human Rights Code. The policy did not provide a testing alternative, due to the reduced efficacy of testing in comparison to vaccination, and non-compliant employees were placed on an unpaid leave with the possibility of discipline for continued non-compliance. The arbitrator generally upheld the vaccination policy as reasonable in the circumstances, but concluded that including the possibility of termination of employment for non-compliance was unnecessary to achieve BC Hydro’s goals, since employees could instead be placed on unpaid leave.

There are significant factual differences between BC Hydro and Fraser, including that the FHA relied on the PHO Order itself, and not its own Policy, to justify the termination of Ms. Capozzi’s employment. In addition, the arbitrator in Fraser noted that under both the Order and the Policy, 460 employees who were refusing vaccination would be ineligible to work for FHA in any capacity for an indeterminate amount of time. Accepting evidence that the healthcare industry was already experiencing strain from labour shortages and the pandemic, and that temporary positions are more difficult to fill than permanent positions, the arbitrator in Fraser found that these difficulties in recruitment and retention justified the termination of Ms. Capozzi’s employment for refusal to be vaccinated. Ultimately, the arbitrator noted, Ms. Capozzi was not eligible to work while the Order remained in effect, and there was no indication that it would be rescinded in the foreseeable future. Accordingly, the arbitrator held that “there was no path forward for [Ms. Capozzie] for continued employment” and FHA was not required to place her on an indefinite leave of absence.

Key Takeaways

The decision in Fraser demonstrates that adjudicators may be more willing to uphold termination of employment for refusal to be vaccinated where the refusal means that the employee cannot attend the workplace or perform their duties, where the vaccination requirement results from a government directive, and where placing employees on unpaid leave as an alternative to termination would present concrete operational difficulties for the employer.