Written on behalf of Peter McSherry
Ontario’s Infectious Disease Emergency Leave Regulation is set to expire on July 30, 2022. The Regulation was passed in 2020 to help with businesses’ uncertainty amid the pandemic. It has been extended four times.
Although the pandemic is not over, it does not appear that it will be extended a fifth time. In preparation for the upcoming change, this blog post provides some guidance to employers and employees about what this may mean for them. It also discusses a recent case from the Ontario Superior Court of Justice, Gracias v. Dr. David Walt Dentistry, which provides additional guidance on how covid precautions affect wrongful dismissal.
What is Infectious Disease Emergency Leave?
Infectious Disease Emergency Leave was a measure put in place during the pandemic. It provided that employees in non-unionized workplaces were deemed on Infectious Disease Emergency Leave rather than constructively dismissed if their work hours were temporarily reduced or eliminated because of the pandemic. The Regulation set out two types of Infectious Disease Emergency Leave: one paid and the other unpaid. Paid leave was for a period of up to three days.
An effect of the newly-recognized regulation was that employers were relieved of the responsibility of making severance payments during a time of financial strain and economic uncertainty. With the measures taken by the province to curb the spread of COVID-19, some businesses had no choice but to significantly cut the hours of employees or else slash jobs altogether. However, the benefits were not entirely one-sided. Under the regulation, employees who were forced to take leave as a result of COVID-19 were able to maintain their jobs if they needed to take extended periods of time off.
Employers will need to reinstate or terminate employees on IDEL
What does this mean for employers? Well, it’s time to make some decisions. Employers can either terminate or reinstate employees that have been on Infectious Disease Emergency Leave. Before deciding what to do, it’s important to know the consequences of each decision.
If an employer opts to terminate an employee without cause, the employee will be entitled to notice. It is implied that this notice will be reasonable. “Reasonable notice” combines statutory notice and common law notice. Statutory notice is set out in the Employment Standards Act and is considered the bare minimum. Statutory notice dictates that employees who have been employed for more than three months are entitled to one to eight weeks of notice, depending on how long they have been employed by the employer. By contrast, common law notice is determined by the courts. It requires assessment of:
- How long the employee has worked for the employer
- The availability of similar or equivalent employment
- What relevant education and training that the employee has had
- The employee’s experience
- The employee’s age
- Any other relevant personal characteristics or circumstances
In lieu of notice, employers can choose to give employees termination pay. Note that not all employees are covered by the entitlements in the Employment Standards Act.
Ontario Court Clarifies Pandemic Wrongful Dismissal Issues
Infectious Disease Emergency Leave was not the only pandemic change that needed clarification. In Gracias v. Dr. David Walt Dentistry, the Ontario Superior Court of Justice awarded an employee pay in lieu of three months’ notice. The decision may be surprising to employers because he had only been employed by the employer for five months and had received $16,000 of the Canada Emergency Response Benefit.
In this case, Ms. Gracias was hired by Walt Dentistry in September 2019 as an Orthodontic Hygienist and Office Administrator. She was dismissed without cause after five months and 21 days of full-time employment in March 2020. This came days after she had informed her employer of her cancer diagnosis that would require her to take some time off of work. She also needed to tend to her son, whose school had closed during the pandemic.
Walt Dentistry provided Ms. Gracias with one week of termination pay in lieu of notice, in line with the employment contract she signed in 2019. The termination clause of the contract read, in part:
15. … By signing below, you agree that upon receipt of your entitlements under the Employment Standards Act, no further amounts shall be due and payable to you, whether under the Employment Standards Act, any other statute, or at common law. In no circumstances will you receive less than your entitlements to notice, severance (if applicable), and benefits continuation (if any), pursuant to the Employment Standards Act. [Emphasis added]
Shortly after termination, Ms. Gracias obtained legal counsel, who attempted to settle her wrongful dismissal claim. Her lawyer also requested a reference letter from the employer so that Ms. Gracias could mitigate her damages. She did not find employment until September 2020, but during her unemployment, she received $16,000 of payments from the Canada Emergency Response Benefit.
The employee should have been given reasonable notice
Because Ms. Gracias’ employment contract did not define the duration of employment, common law dictates that the employee is entitled to reasonable notice if termination occurs without cause. Additionally, the provision in the contract regarding notice for dismissal without cause could not be enforced. The Court explained:
“… if there is contract language that would preclude an employee from his or her entitlement to reasonable notice of the dismissal without cause, then that preclusive provision is unenforceable if the employment contract viewed in its entirety contravenes s. 5 of the Employment Standards Act, 2000, which provides that no employer and no employee shall contract out of or waive an employment standard and any such contracting out or waiver is void.” [Emphasis added]
In other words, an employment contract can set different standards for the employment relationship. However, those different standards must be in line with the Employment Standards Act at a minimum, or it will be found void.
The effect of CERB on wrongful dismissal damages
Even though Ms. Gracias collected $16,000 in payments from the Canada Emergency Response Benefit, the court found that this could not be deducted from the wrongful dismissal damages that the employer owed her.
The Court considered Iriotkis v. Peninsula Employment Services Limited in coming to this conclusion. In that case, the Court stated that CERB cannot be viewed in the same light as Employment Insurance benefits, which can be considered in damage calculations for wrongful dismissal. As CERB was an ad hoc program that was not paid for by employers or employees, and as CERB payments are often far below the base salary earned by employees, it would not be fair to deduct them from wrongful dismissal damages.
Common law reasonable notice is unaffected by the pandemic
Ms. Gracias suggested that, because of the pandemic, the required reasonable notice period was extended. The Court, however, held that the existence of pandemic on its own is not enough to extend reasonable notice. Courts still need to assess the other factors of reasonable notice as well in making their determination of the appropriate amount of time.
In this case, the employee was looking for a new job in the months before her termination without cause and submitted evidence of applying to more than 130 jobs. The job market in Ms. Gracias’ profession was robust compared to other industries. The economic downturn did not affect her profession, so a longer notice period was not justified.
In the end, Ms. Gracias was granted a three-month notice period, minus the one-week termination pay she already received, for a total judgment of $17,587.11.
Contact Employment Lawyer Peter A. McSherry in Guelph for Trusted Advice in Employment Disputes
At Peter A. McSherry Employment Lawyer, we provide each of our clients with a personalized assessment of their case. We represent employees in employment law matters and provide each of our clients with compassionate care, attentive service and the efficient resolution of legal issues. We also regularly assist employers in managing difficult employment situations by providing strategic advice on compliance with employment laws and risk management. We have experience in all types of employment law matters, from wrongful dismissal to workplace harassment. Contact employment lawyer Peter A. McSherry at 519-821-5465 or by e-mail to schedule a consultation.