The recent Ontario Superior Court decision in Covenoho v. Pendylum Inc., 2016 ONSC 4969 addressed whether it is lawful to request background checks after employment of an employee has commenced. The Court held that an employer’s decision to request a criminal background check after employment had commenced was lawful under the applicable 12–month fixed term contract and the employee was not entitled to damages when her employment was terminated after she refused to consent to the background check.
In this case, the individual was originally hired as an “independent contractor” pursuant to a 12–month fixed term contract by Pendylum Inc. to provide services to its client Ceridian. Several weeks after Ms. Covenoho commenced providing services, Ceridian advised Pendylum that all of the contractors it supplied would have to submit to criminal background checks given the sensitive nature of the data involved in the work. Pendylum advised Ms. Covenoho of this obligation and put her on notice that if she refused her contract would be terminated effective immediately.
Ms. Covenoho’s independent contractor agreement provided her services could be terminated early for cause or if Pendylum’s client terminated its contract for her services or on 2 weeks’ notice.
Ms. Covenoho refused to consent to or undergo a criminal background check. Consequently, two weeks after she was advised of the obligation to consent to and undergo a criminal background check, her services were terminated.
Ms. Covenoho alleged that given the obligation to consent to a criminal background check was not made before she was hired, she was not obligated to consent and she should be paid the 40 week balance of the employment contract.
On a motion for summary judgement, Mr. Justice Faieta reviewed the facts and ruled as follows:
- Covenoho was deemed to be an “employee” and not a contractor at law given she resembled an employee under the various legal tests.
- Covenoho was not entitled to any Termination Pay under the Ontario Employment Standards Act, 2000 because she did not have 3 months of service.
- Ms. Covenoho and Pendylum had agreed to a termination clause and there was nothing unlawful in Pendylum terminating the contract on the basis of her refusal to consent to a criminal background check. Justice Faieta held:
The Defendant explained to the Plaintiff (and other employees) more than two weeks prior to her termination, that her employment would be terminated if she refused to consent to an educational and criminal background check. There was nothing untruthful, misleading or unduly insensitive about the Defendant’s actions.
Therefore, this case stands as authority for the proposition that an employer can request a criminal and educational background checks if it is necessary for legitimate work purposes during employment, even if there was no obligation on the employee to provide one when hired. Further, and subject to the specific wording of the applicable contract, a failure on the part of the employee to consent to such a background check can constitute cause to terminate the contract immediately.
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