Supreme Court Upholds Termination for Breach of Drug and Alcohol Policy

Written By John C. Batzel, Christine Plante, Carl Cunningham and Kyla Stott-Jess

The Supreme Court of Canada’s decision in Stewart v. Elk Valley Coal Corp., 2017 SCC 30 is good news for employers. The Court upheld the prior decisions of the Alberta Court of Appeal and Alberta Human Rights Tribunal, finding that the termination of an employee with a cocaine addiction was due to the employee’s breach of a Drug and Alcohol Policy, and not prohibited by human rights legislation. While the case is certainly employer-friendly, we caution employers to take note of a number of fact-specific considerations at play. Terminations in the disability context remain ripe for human rights complaints, so care should continue to be exercised in these cases.

Tribunal, Queen’s Bench and Court of Appeal Decisions

Ian Stewart was a heavy equipment operator at Elk Valley’s coal mine. In November, 2005, he tested positive for cocaine after a workplace incident in which he collided with another vehicle. Elk Valley terminated Mr. Stewart for failing to comply with its Drug and Alcohol Policy. The policy was described as a ‘No Free Accidents’ policy—it required employees to voluntarily come forward and disclose drug use before any incidents occurred. Employees who did so would be assisted with rehabilitation and suffer no discipline, while those who failed to do so would be disciplined, up to and including termination. The policy specifically stated that “abuse, dependency or addiction” would not spare an employee from discipline or termination if the employee did not self-report such issues prior to the incident.

Mr. Stewart filed a human rights complaint, arguing that he suffered from an addiction-related disability, and that his termination violated human rights laws. The tribunal disagreed, finding that the termination was due to Mr. Stewart’s breach of the policy, and not because of his addiction.  The Court of Queen’s Bench upheld the tribunal decision on this point, but also found in obiter that if the termination had been due to Mr. Stewart’s addiction, the requirement for accommodation to the point of undue hardship would not have been met.  The Court of Appeal upheld the tribunal decision in full, and dismissed the appeal.

Supreme Court Decision

Chief Justice McLachlin, writing for the six-Justice majority of the Supreme Court, also upheld the tribunal decision, finding that Mr. Stewart had failed to prove that his termination was due to disability, as opposed to a breach of the policy. The court approached the tribunal decision with considerable deference, applying a reasonableness standard to its review. In doing so, the court focused largely on the third part of the three-part test for prima facie discrimination—whether there is a nexus between a protected ground (disability) and the adverse effect (termination).  In finding for the employer, the majority found that Mr. Stewart had failed to prove this nexus. He had the capacity to comply with the policy, but had failed to do so, and the termination letter clearly set out that termination was for breach of the policy. Because of its findings on this issue, the majority did not address whether Elk Valley had met its obligation to accommodate to the point of undue hardship.

The concurring decision by Justices Moldaver and Wagner agreed that the appeal should be dismissed, but disagreed with the majority about how to arrive at that dismissal. They found that the test for prima facie discrimination was met, as there was sufficient nexus between Mr. Stewart’s disability and the termination, and his apparent control over his drug use did not negate this nexus. In the second stage of the test for discrimination, however, they found that Elk Valley had met its duty to accommodate to the point of undue hardship. In coming to this decision, the concurring Justices focused on the safety sensitive nature of the workplace and the intended deterrent effect of the policy. Their reasoning suggests that a safety-sensitive workplace may justify a lower accommodation standard, although the deferential standard of review applied by the court means that this remains a suggestion rather than a firm statement.

The dissenting decision by Justice Gascon also found prima facie discrimination, but he differed from Moldaver and Wagner in concluding that the required accommodation had not occurred.

Lessons for Employers

Although this is an employer-friendly ruling from Canada’s highest court, it should not be seen as a blanket endorsement of terminations relating to drug and/or alcohol use. Rather, this decision drives home the importance of the following factors and considerations for employers:

• Well-drafted drug and alcohol policy: Elk Valley would not have succeeded if they had not had a well-drafted policy to rely on. Employers are encouraged to ensure they have good drug and alcohol policies in place, and to ensure that employees have signed off on these policies.
• Safety-sensitive environment: The Elk Valley decision concerned a safety-sensitive workplace (a mine), and an employee in a safety-sensitive role (heavy equipment operator). These considerations continue to play an important role in drug and alcohol use cases, especially in assessing whether the duty to accommodate an employee alleging a protected ground has been met. Because it remains easier to defend terminations in a safety-sensitive workplace, employers who operate in environments that are less safety-sensitive may have difficulty enforcing drug and alcohol policies which impose such stringent discipline measures.
• Well-drafted termination letters: The tribunal and the courts all focused on Elk Valley’s reasons for termination, which Elk Valley maintained was breach of the policy. This argument was only possible due to a termination letter which clearly set out that the reason for termination was a breach of the policy. Employers who are considering terminations are reminded of the importance of termination letters, and encouraged to be clear and refer to the policy relied on to terminate employment.

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