Common law constructive dismissal prosecution

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Brittany Taylor here with another legal update, and this one is a doozy.

You will probably recall that in April, Stuart recorded a vlog regarding the Coutinho case, an unprecedented decision that ruled for the first time that an employee who had been temporarily laid off during the pandemic had been implicitly dismissed from his job.

The move had huge implications for employers, many of whom had no choice but to lay off workers during the pandemic, when business fell sharply or when the government ordered shutdowns. If the temporary layoff of an employee constituted constructive dismissal, even though it happened during the pandemic, amid impossible circumstances, then many employers could face significant legal liability with respect to benefits. starting point. However, less than two months later, another Ontario court ruled on this issue and shockingly came to the completely opposite conclusion.

In Taylor and Hanley Hospitality Inc., the employee in question was laid off from her job at the start of the pandemic in March of last year. She applied for constructive dismissal following this layoff. The employer in this case argued that the Ontario government had asked it to shut down all of its storefronts and some of its stores entirely and that it really had no choice but to lay off employees. .

As in the Coutinho case, the court of Taylor did not really answer the question of whether a unilateral layoff constitutes constructive dismissal, the law is well established that it does, we know the answer to that question. Instead, the question they were trying to answer is a bit more nuanced. Essentially, they were trying to understand whether the Ontario government took away an employee’s right to sue for constructive dismissal at common law when it amended the Employment Standards Act and created emergency leave for infectious diseases.

To quickly summarize this question, you may recall that a few months after the start of the pandemic, the government created emergency leave for infectious diseases. Now this was designed to protect employees who had to take time off work for reasons related to COVID-19, but these changes also indicated that any employee who had been terminated by their employer was retroactively deemed to be on emergency leave. for infectious diseases. This has allowed employers to avoid the maximum time limits for temporary layoffs under the Employment Standards Act, and also provided employees on leave with job protection. However, it also meant that employees who had been forced to take time off could not sue their employer under the Employment Standards Act. However, it was not clear whether this change also removed the possibility for an employee to sue his employer for constructive dismissal at common law.

In Coutinho, the court considered that the changes made to the Employment Standards Act clearly did not preclude an employee’s right to sue for constructive dismissal at common law. It specifically relied on Article 8 paragraph 1 of the ESA which expressly states that the civil rights of an employee are not affected by the provisions of the Employment Standards Act. He also pointed to the Department of Labor’s own guidance on this matter, which appeared to confirm that an employee’s common law rights were not affected by changes to the Employment Standards Act.

The court totally rejected this argument in Taylor, noting that this would create an absurd result when an employee could be on leave for the purposes of Employment Standards Act, but ended by constructive dismissal at common law. The court noted that the common law evolves as times change make it necessary. In this case, the legislature had created emergency infectious disease leave in response to extremely difficult circumstances, including some issues it had itself created, such as mandatory closings. Allowing employees to sue for constructive dismissal at common law would essentially nullify the protection that the legislature had expressly afforded to employers.

So now we have two completely contradictory decisions on exactly the same issue.

Where is this taking us? Unfortunately, that leaves us in limbo for the time being. We will probably have to wait for a higher court to rule on this issue before we have any certainty on this issue, and until then, it remains a complex debate with compelling motives on both sides.

On the one hand, it seems grossly unfair to penalize employers for taking advantage of the help the government has offered them in the form of emergency infectious disease leave. Many employers found themselves in a position where layoff was the only option available to them. If the Coutinho If the case is followed, employers may owe substantial damages to employees, which could result in financial ruin for many.

On the other hand, some employees have now been off work without pay for over a year and with no recourse available to them. Yes Taylor is being followed, many have struggled to find new jobs and frankly could experience financial instability as well.


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