The Ontario Superior Court has ruled once again on the right of an employee to assert a constructive dismissal in light of the O. Reg. 228/20: Infectious Disease Emergency Leave (“the Regulation”) under the Employment Standards Act, 2000 (ESA). In the latest decision, the court ruled that the Regulation does not preclude an employee from asserting a common law constructive dismissal.
As discussed in previous posts, under the Regulation neither a reduction in the employees hours of work or wages constitute a constructive dismissal under the ESA if they occur during the COVID-19 Period. The COVID-19 Period keeps changing on us, but it currently runs from March 1, 2020 to September 25, 2021. There have been conflicting decisions about whether the Regulation also removes an employee’s right to assert a constructive dismissal under the common law.
The Coutinho Decision – NO
We wrote about the Coutinho v. Ocular Health Centre Ltd. (Coutinho) decision in May, where the court ruled that the Regulation does not take away an employee’s ability to sue for constructive dismissal under the common law. You can read that post here.
The Taylor Decision – YES
Following Coutinho, the Taylor v. Hanley Hospitality Inc. (Taylor) decision came out, where the court decided that the Regulation DID displace the employees ability to assert a common law constructive dismissal. You can read our post on the Taylor decision here.
In Taylor, the court emphasized the purpose of the Regulation, which was to limit the negative impacts on businesses of the government decision to have them closed. If employees could still assert common law constructive dismissal claims, then the purpose of the Regulation could not be realized.
The court also reasoned that the Regulation converted COVID-19 layoffs into deemed IDELs and therefore the affected employees were no longer on common law layoffs but on an ESA leave – the IDEL. The statutory rights established by the ESA with respect to leaves apply and not the common law with respect to layoffs. The intention of doing this was to negate the very real risk to businesses with respect to laying employees off without the contractual right to do so.
The Fogelman Decision – NO
Fogelman v. IFG was decided in June 2021, and considered the issue of whether the Regulation stood as a bar to a common law constructive dismissal claim. While the defendant employer did not seriously argue this point, the court addressed it, landing on the Coutinho side of the fence, saying: “a regulation under the ESA cannot supersede civil remedies available at common law. This is because s. 8(1) of the ESA states that “no civil remedy of an employee against his or her employer is affected by this Act.”
If the legislature intended that the Regulation was to impact an employee’s common law remedies, it would have needed to address s.8(1) directly.
Waiting for Word from the Court of Appeal
Taylor has been appealed to the Ontario Court of Appeal, where they will no doubt consider these three cases. We will keep you posted on what happens next!
If you have questions about how to manage COVID-19 changes in your workplace, get in touch for a consultation.
