We recently wrote about the Ontario court decision Coutinho v. Ocular Health Centre Ltd. (“Coutinho”) which offered the first judicial interpretation of Ontario Regulation 228/20: the Infectious Disease Emergency Leave Regulation (the “IDEL Regulation”) in a COVID-19-related constructive dismissal case. In Coutinho, the court concluded that the IDEL Regulation did not bar an employee from suing for constructive dismissal at common law.
More recently, an Ontario court issued a decision which came to the opposite conclusion, reasoning that the purpose of the IDEL Regulation is to bar employees from suing for constructive dismissal if they were laid off as a result of the COVID-19 pandemic.
Employee Claims Constructive Dismissal
The employee worked for Tim Hortons in Ontario.
Following the Ontario Government’s state of emergency declaration due to the COVID-19 pandemic on March 17, 2020, Tim Hortons was required to close all of its storefronts and was limited to takeout and delivery.
As a result, on March 27, 2020, the employee was temporarily laid off from her employment.
On August 18, 2020, the employee was advised in writing that she was being recalled to her employment, effective September 3, 2020.
Although the employee returned to work at Tim Hortons, she filed an application with the court claiming that her temporary layoff was a constructive dismissal and that her employment had been terminated. She argued that the layoff “was a business decision made by the company in response to unfavourable economic conditions”. She based her claim on the Employment Standards Act (the “ESA”) and the IDEL Regulation, arguing that they did not displace the common law doctrine that a layoff is a constructive dismissal.
In response, Tim Hortons argued that the Ontario Government’s COVID-19 emergency declaration had required it to close all of its storefronts and make reductions to its workforce. As such, it had no other choice but to temporarily lay off employees, including the employee.
Court Rules Against Employee
The court began by reviewing the relevant provisions of the ESA and the IDEL regulation. Specifically, the court reviewed s. 7(1) of the IDEL Regulation, which provides that a temporary reduction or elimination of an employee’s hours of work by the employer for reasons related to COVID-19 during the COVID-19 period does not constitute constructive dismissal. Section 7(1) reads:
7. (1) The following does not constitute constructive dismissal if it occurred during the COVID-19 period:
1. A temporary reduction or elimination of an employee’s hours of work by the employer for reasons related to the designated infectious disease.
2. A temporary reduction in an employee’s wages by the employer for reasons related to the designated infectious disease.
Having reviewed the relevant legislation, the court concluded that:
“All temporary layoffs relating to COVID-19 are deemed to be IDELs, retroactive to March 1, 2020 and prospective to the end of the COVID-19 period. As such, the [employee]’s layoff is no longer a layoff. It is an IDEL and the normal rights for statutory leaves are applicable (e.g., reinstatement rights, benefit continuation). This means any argument regarding the common law on layoffs has become inapplicable and irrelevant.”
The court then reviewed the conclusions found in Coutinho. The court disagreed with Coutinho’s legislative interpretation, finding instead that the decision offended the rules of statutory interpretation to give an interpretation that rendered the legislation meaningless. Moreover, the court held that the IDEL Regulation“can and did change the common law.” The court then stated plainly:
“Coutinho is wrong in law. This court is not bound by it.”
As a result, the court held that there had been no constructive dismissal by Tim Hortons when the employee was placed on IDEL. The employee’s claim was therefore dismissed.
If you are an employee concerned about the legality of workplace policies, or an employer looking to ensure you stay compliant with health and safety regulations as they relate to COVID-19, contact the offices of Guelph employment lawyer Peter A. McSherry. We regularly assist employees with employment and labour issues. Contact us online or by phone at 519-821-5465 to schedule a consultation.