A trio of conflicting decisions from Ontario’s Superior Court of Justice has left employers confused about a possible onslaught of wrongful dismissal lawsuits stemming from temporary layoffs due to the coronavirus pandemic.
The confusion arises because judges have come to different conclusions about Ontario’s infectious disease emergency leave regulation, which provides that temporary layoffs in the “COVID-19 period” don’t amount to constructive dismissals under the Employment Standards Act. In other words, temporary layoffs for pandemic-related reasons aren’t dismissals requiring employers to make the minimum severance payments stipulated by the legislation.
However, at common law, a layoff, even in the form of reduced hours, is a constructive dismissal. What remains unclear, then, is whether the infectious disease regulation precludes employees from suing for common law constructive dismissal in the civil courts. Complicating things is section 8(1) of the act, which states that the legislation and regulations don’t affect any “civil remedy” of an employee. The Ontario Ministry of Labour’s guide, moreover, states that the regulation doesn’t address constructive dismissal in the context of the common law.
“Before any court pronounced on this issue, just about everyone assumed that [infectious disease emergency leave] did not affect the common law,” says Mitchell Rose of Mitchell Rose Professional Corp. in Toronto.
As it turns out, two of the three judges who dealt with the issue have recently ruled in favour of employees. In April, Justice David Broad found in Coutinho v. Ocular Health Centre Ltd. that the regulation doesn’t exclude employees’ common law rights. Just five weeks later, and seemingly unaware of Broad’s ruling, Justice Susan Vella reached the same conclusion independently in Fogelman v IFG.
But within five days, on June 7, Justice Jane Ferguson decided Taylor v. Hanley Hospital. She concluded that Broad was wrong and that the infectious disease regulation did oust common law rights. As she saw it, the regulation’s wording reflected that the Ontario government “recognized the inherent unfairness” in exposing employers to common law constructive dismissal claims. However, it doesn’t appear that Ferguson was aware of Vella’s judgement in Fogelman — although it’s not at all certain that the existence of a second contrary opinion would have swayed her reasoning.
The upshot is that the score is two to one in favour of the interpretation that employees haven’t lost their common law rights. None of the judges, all superior court judges, were bound by decisions of their peers. Going forward, judges dealing with this issue are also not bound by any of the previous decisions. Clarity, then, can’t be expected until Taylor, the first of these cases to be appealed, reaches the Ontario Court of Appeal — likely sometime in the next year.
Ryan Wozniak of Wozniak Law Professional Corp. in Toronto believes the provincial court of appeal will uphold employees’ right to sue at common law. “On a theoretical legal level, a strict reading of [regulation] results in the conclusion that the regulation does not foreclose common law rights.”
Until then, the uncertainty will persist.