Emergency leave for infectious diseases is not constructive dismissal at common law – employment and hr



Canada: Emergency leave for infectious diseases is not constructive dismissal at common law

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In May 2020, Ontario Regulation 228/20 was introduced in the Employment Standards Act (ESA), exempting temporary hours or pay cuts related to COVID-19 from the usual layoff and constructive termination provisions. We published a detailed bulletin on the new regulations last spring. At the time, while it was clear that the regulation provided legal protection for employers seeking to impose reductions in hours and / or wages due to COVID-19, it was less clear how the regulation would affect workers. common law constructive dismissal requests. On June 7, 2021, the Ontario Superior Court of Justice provided long-awaited guidance on this issue.

In Taylor v. Hanley Hospitality Inc.1, Ferguson J. allowed the defendant employer’s rule 21 motion to strike the employee’s claim for constructive dismissal on the grounds that the settlement applies not only to statutory constructive dismissal claims , but also to common law constructive dismissal requests. The Court specifically ruled that, in accordance with the Regulations, all temporary layoffs related to COVID-19 are deemed to be emergency infectious disease leave (IDEL), retroactive to March 1, 2020. As such, the layoff employee’s layoff is no longer a layoff, and is in fact an IDEL, and normal statutory leave entitlements apply. The court ruled that this means that any common law argument about layoffs has become inapplicable and irrelevant to these types of scenarios under the regulations.

What would you like to know

  • The regulation considers that any layoff related to COVID-19 is an IDEL: The Court ruled that an employee cannot be on leave of absence for the purposes of the ESA and yet be terminated by constructive dismissal for the purposes of the common law. It would be an “absurd result”. Therefore, the Settlement should be interpreted as applying to all constructive dismissal claims.
  • The regulation does not prevent the SEC from replacing common law: The Court noted that there was nothing in the regulations that prevented the ESA from displacing an employee’s common law rights. In fact, the Court of Appeal has already ruled that statutes supersede the common law in a case involving ESA.
  • The context of the regulation is important: The Court noted that it was important to remember the background to IDEL and the regulations. Specifically, that the legislature first created a “problem”, when a state of emergency was triggered, forcing employers to cease or reduce their activities. In doing so, Parliament exposed employers to allegations of constructive dismissal at common law. To avoid these consequences, the legislator amended the SEC to create IDEL and the regulation. On the basis of this background, it should be obvious what the legislature’s intention was in doing so.
  • Coutinho considered “bad in law”: The Court considered at length the recent decision of the Ontario Superior Court in Coutinho v. Ocular Health Center Ltd.2 In Coutinho, on a motion for summary judgment, the Court held that the Regulations did not necessarily exclude a common law action for constructive dismissal. However, Ferguson J. in that case concluded that the analysis in
    Coutinho was “incorrect in law” because it ignored the context of IDEL and the Regulations. Further away,
    Coutinho failed to take into account that his interpretation of the Regulations rendered the statute meaningless and, therefore, contravened the rules of statutory interpretation.

Summary of the facts

Candace Taylor was temporarily laid off from her job on March 27, 2020. On August 18, 2020, Ms. Taylor was recalled to her job and returned to her job. Ms. Taylor nevertheless brought an action against her employer for constructive dismissal during the period of her alleged temporary layoff. In her request, Ms. Taylor acknowledged that the temporary layoff was linked to the COVID-19 pandemic. The employer, Hanley Hospitality, brought a Rule 21 motion to strike Ms. Taylor’s complaint on the grounds that under the Regulations Ms. Taylor’s layoff was in fact an IDEL and, therefore, could not be constructive dismissal under the law. or common law.

The court’s decision

In the ruling, Justice Ferguson took judicial notice that hundreds of thousands of Canadians have seen their jobs cut short by the COVID-19 pandemic, which the Ontario government passed an emergency order requiring many businesses (including the defendant) to close their stores and limit their services and that the province has taken legislative action to deal with the impacts of the pandemic on jobs.

Justice Ferguson reviewed Ontario Regulation 228/20 noting that under the Regulation, a temporary reduction or termination of an employee’s working hours by the employer for reasons related to COVID-19 does not constitute constructive dismissal.

Judge Ferguson then turned to Coutinho v. Ocular Health Center Ltd. in which Broad J. ruled that Rule 228/20 did not preclude an employee from making a common law constructive dismissal claim in connection with a layoff without pay for reasons related to COVID-19. Judge Broad’s decision in
Coutinho Focused on section 8 (1) of the Regulations which provides that (subject to limited circumstances that were not present) no civil remedy by an employee against his employer is affected by the ESA. In addition, Justice Broad referred to the Ontario Ministry of Labor guide which stated that the regulation only affected what constituted constructive dismissal under the ESA and did not address what constituted dismissal. disguised as common law. Therefore, the Justice Commission concluded that the common law constructive dismissal claims were not affected by the settlement.

Ferguson J. concluded that Coutinho had been badly decided. According to Judge Ferguson, it is breaking the rules of statutory interpretation to give an interpretation which renders the meaning of a law, which happened in
Coutinho. Ferguson J. also ruled that subsection 8 (1) of the ESA did not support the proposition that Justice Broad had espoused, but rather that subsection 8 (1) had been interpreted by the courts as simply indicating that ESA no. ‘does not set out an exclusive forum for dealing with matters set out in the ESA, and that subsection 8 (1) had never been interpreted as preventing the ESA from supplanting the common law. On the contrary, the Ontario Court of Appeal has already stated that laws passed by the legislature supersede the common law and that it is a mistaken premise that the common law continues to operate independently of the ESA. Finally, Justice Ferguson ruled that the regulations can and do change the common law, meaning that the reductions or elimination of COVID-19-related hours of work are not layoffs or constructive dismissals. , but are considered as statutory holidays.

Granting the employer’s motion and dismissing the action, Ferguson J. concluded by stating that the Ontario government recognized the injustice inherent in subjecting employers to wrongful dismissal claims as a result of the government’s imposition of a state of emergency, and therefore adopted the regulations. Justice Ferguson noted that if the government had not taken this step, it would only have served to worsen the economic crisis of the pandemic.


1 2021 ONSC 3135

2 2021 ONSC 3076

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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