By Barry W. Kwasniewski

It is “just common sense” that a law intended to provide relief to employers during a state of emergency should not, as a result, subject them to wrongful dismissal claims, according to the Ontario Superior Court. Such a situation is inherently unfair and “would only serve to make the economic crisis from the pandemic even worse.” This reasoning is from Taylor v Hanley Hospitality (“Taylor”), released June 7, 2021, which ruled on the legal effect of Infectious Disease Emergency Leave (“IDEL”) provisions. IDEL was added to the Ontario Employment Standards Act, 2000 (“ESA”) by the provincial legislature last year and set by a government regulation in response to the COVID-19 pandemic. Amendments to the ESA introduced in May 2020 provided that all temporary layoffs relating to COVID-19 are deemed to be IDEL, retroactive to March 1, 2020, and continuing until the end of the COVID-19 period, which was recently extended to September 25, 2021. Charities and not-for-profits in Ontario are also impacted by this issue in considering the risks of placing employees on temporary leave for reasons related to COVID-19.

The decision in Taylor contradicts an April 27, 2021 judgment from the Ontario Superior Court in Coutinho v Ocular Health Centre Ltd. (“Coutinho”), leaving the current law in an uncertain state. The court in Coutinho held that IDEL, which gives employers the option to place employees on leave for reasons related to COVID-19, does not preclude employees from claiming constructive dismissal under the common law. The court in Taylor, on the contrary, ruled that allowing constructive dismissal claims at common law would render IDEL useless; therefore, according to established precedent, the statutory provisions must displace the possibility for employees to claim their common law rights. The disagreement between the two cases also involves the legal interpretation of “constructive dismissal” according to the common law, and its meaning under the ESA. This Charity & NFP Law Bulletin examines and compares the reasoning in both cases.

For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 497.

Read the June 2021 Charity & NFP Law Update