Canadian HR Reporter

CANADIAN HR REPORTER January 23, 2017 EMPLOYMENT LAW 5 RECRUITING FINANCIAL PROFESSIONALS? O er positions to over 200,000 Members Highly targeted advertising Immediate matching resume database access FOR MORE INFORMATION, cpacanada.ca/CPASource TELEPHONE•416 204 3284•EMAIL•TGardiner@cpacanada.ca 14-126a_EN_CPAsource_fullpagead_9.625x7.indd 1 1/5/2016 3:24:31 PM Refusal to have background check grounds for worker's dismissal in Ontario New employee felt recently announced checks were not a term of her employment Background checks are a typical part of the hiring process. But what about after the employee is hired — can an employer insist a person consent to a background check? And if she does not consent, can the employee be terminated? In Covenoho v. Pendylum Inc., the Ontario Superior Court of Justice tackled that issue and determined Pendylum was entitled to termi- nate Joss Covenoho without cause for refusing to consent to educa- tional and criminal background checks after she had begun work, and that the termination was not an act of bad faith by Pendylum. Covenoho was hired pursuant to a one-year, fi xed-term contract to perform services for one of Pen- dylum's clients, Ceridian Canada. Shortly after the hire, Ceridian in- formed Pendylum that education and criminal background checks were required for Covenoho employees as well as others per- forming services for Ceridian due to the sensitive nature of the data accessible by these employees. So Pendylum informed staff that if they declined to consent to either of these checks, "Ceridian has stated that it must release you from your duties there." When informed of the require- ment, Covenoho refused, taking the position that the checks were not a term of her employment with Pendylum. Less than three months into her one-year con- tract, and as a result of her refusal to agree to the background checks, Pendylum terminated Covenoho's employment in accordance with a provision of the fi xed-term con- tract, which allowed for termina- tion by either party with at least two weeks' notice. In the termination letter, Pen- dylum stated that Covenoho's fixed-term contract was being terminated because of "Ceridian's decision to terminate its contract with Pendylum Inc. for your ser- vices." But Covenoho commenced legal proceedings seeking dam- ages based on the balance of the fi xed-term contract and bad-faith damages, among other things. On a motion for summary judgment, the Ontario Superior Court of Justice said the language in the contract expressly provid- ed for early termination by either party upon provision of at least two weeks' notice, and Covenoho was not entitled to payment for the remainder of the term. e court also determined Pen- dylum's termination of Covenoho was not an act of bad faith as it told her she would be terminated if she did not consent to the background checks. e court stated there was, "nothing untruthful, misleading or unduly insensitive about (Pen- dylum's) actions." Accordingly, Covenoho was not entitled to any additional notice or damages and the action was dismissed. Lessons for employers Employers should carefully consider whether background checks are required prior to hir- ing employees. If so, they should be conducted at the time of hir- ing. Further, employers should consider incorporating into em- ployment contracts the possibility of background checks being con- ducted during the employment relationship. If a background check is re- quired during the employment relationship and an employee re- fuses, the employer may be able to terminate that employee on the basis of his refusal to consent. If an explanation is provided to the employee and the employee is notifi ed in advance that her re- fusal to consent may result in her termination, then the termination will likely not give rise to liability for bad faith damages. For more information see: Covenoho v. Pendylum Inc., 2016 CarswellOnt 13667 (Ont. S.C.J.). Ronald S. Minken is a senior lawyer and mediator at Minken Employ- ment Lawyers, an employment law boutique in Markham, Ont. He can be reached through www.minkenem- ploymentlawyers.ca. He gratefully acknowledges Sara Kauder and Kyle Burgis for their assistance in prepara- tion of this article. Background checks are a typical part of the hiring process. But what about after the employee is hired — can an employer insist a person consent to a background check? And if she does not consent, can Ronald Minken Legal VieW Credit: Google Street View Pendylum's offices in Richmond Hill, Ont.

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