June 11, 2020

Temporary Layoffs and Constructive Dismissal  – Recent Legislation
There has been considerable discussion surrounding the Ontario government’s legislation introduced on May 29 regarding temporary layoffs and constructive dismissal claims in light of the COVID-19 pandemic.

Normally, significantly reducing or eliminating hours of work, or reducing wages could be considered a constructive dismissal for ESA purposes, even if the employer’s measures in this regard are temporary.

During the pandemic employers have been forced to consider how those principles apply during these unprecedented times. The new regulations provide some clarity.
Specifically, under the Regulations, an employer’s decision

1. to temporarily reduce or eliminate an employee’s hours of work for reasons related to COVID-19, or
2. to temporarily reduce an employee’s wages for reasons related to COVID-19,

will NOT be considered a constructive dismissal under the ESA if the employee’s employment is terminated and severed on or after May 29, 2020.

It should be noted that, although not specified in the Regulation, the Ministry of Labour has indicated that the Regulation is not intended to affect or apply to common law claims of constructive (or wrongful) dismissal filed in Superior Court. 

Accordingly, despite hoping to receive clarification from the government, the issue of whether at common-law a temporary layoff or reduction of hours related to the pandemic is a constructive dismissal still remains to be determined at this time by the courts or legislature.

You may have other questions surrounding actions you or your employees may have implemented and how these may effect reopening.

Please contact me for advice on the specifics of your situation and for assistance working through your staffing matters.

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ADDITIONAL RESOURCES

• Learn more about Stage 1 of reopening Ontario.
• See the list of Stage 1 businesses
• Learn more about A Framework for Reopening our Province.
• Find workplace safety guidance documents to prepare for reopening.
• Information and advice to help your business navigate the economy during COVID-19.
• Provide your input on the economic impacts of COVID-19.
• See how your organization can help fight COVID-19.
• Visit Ontario’s website to learn more about how the province continues to protect the people of Ontario from COVID-19.

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