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An Early Glimpse at COVID-19 and the Law of Dismissal From Employment

 

Although we all remain mired in the “pandemic” it has only been 15 months.  For our civil system of justice that, obviously unfortunately for the worst, is but a moment in time.  However, we do now have our first case out of the Ontario Superior Court of Justice addressing COVID-19 and the law of wrongful dismissal in Ontario.  A decision was rendered by the Honourable Mr. Justice Broad on April 27th, 2021 in the context of a Summary Judgment Motion.  Justice Broad addressed simply the issue as to whether an employee’s layoff pursuant to Ontario Regulation 228/20 (Infectious Disease Emergency Leave under the Employment Standards Act) constituted constructive dismissal.  The Court ruled that it may indeed constitute dismissal and therefore  dismissed the Defendant’s Motion for Summary Judgment to dismiss the action and granted Judgment in favour of the Plaintiff employee/former employee.

Very simply, the Regulation provides that 5 conditions be satisfied for the provisions of the Regulation to apply:

  1. The employee not be subject of a Collective Agreement and represented by a trade union
  2. The employee be subject to a temporary reduction or elimination in hours of work and/or wages
  3. It is the employer who temporarily reduces or eliminates the employee’s hours of work and/or wages
  4. A temporary reduction or elimination of the employee’s hours of work and/or wages must have occurred for reasons related to COVID-19
  5. The above four conditions must occur during the defined COVID-19 period

Regulation 228 is a product or derivative of the Employment Standards Act, 2000.  Section 8(1) of the Act provides that, but for very specific circumstances, no civil remedy (lawsuit) of an employee against his/her employer is affected by the Employment Standards Act or its Regulations thereunder.  Were an employee/former employee to file a complaint to the Ministry of Labour pursuant to the provisions of the Employment Standards Act that employee/former employee would be precluded from advancing a civil lawsuit, but in the absence of same Section 8(1) applies.

The Regulation (at Section 7) deems a temporary layoff for COVID-19 related reasons to not constitute a constructive dismissal.  However, Section 7 of the Regulation is, according to Mr. Justice Broad constrained by Section 8(1) of the Employment Standards Act which Section states unequivocally that an employee’s civil remedy against his/her employer shall not be affected by any provision of the Act.  In addition, the Motions Judge went on to consider a publication of the Ontario Ministry of Labour, Training and Skills Development, which addressed temporary changes occasioned by COVID-19.

It has always been clear at common law that an employer has no right to lay off an employee and that absent an agreement to the contrary, a unilateral layoff by an employer is a substantial change in the employee’s employment, and thereby constructive dismissal.  Justice Broad ruled that the employee “was entitled to treat the employer’s unilateral imposition of the layoff as bringing the contract of employment to an end and had the immediate right to sue for constructive dismissal.”

The irony of this case is that it was the employer who brought the Motion for Summary Judgment, fully expecting the Regulation to dictate.  Justice Broad had other ideas, dismissing the Motion for Summary Judgment and granted Judgment for the statutory entitlement to termination pay.  The Court did not need consider damages as the employee had, almost immediately after dismissal, secured other employment thereby suffering no damages.  However, Judgment was granted in the amount of the statutory notice period.

In the event that an employee laid off pursuant to the Regulation did not have the good fortune of securing alternate employment a claim for wrongful dismissal, with damages in the normal course, would be the norm.

This very recent decision can, and no doubt will, be a game changer.  Accordingly, we may expect that either this case, or perhaps others likewise, will be appealed.  The impact upon employers who have laid off employees pursuant to the Regulation may well, absolutely irrespective of that Regulation, be liable for constructive dismissal.

 

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