Last month, we wrote about a case that confirmed that Ontario’s Infectious Disease Emergency Leave (“IDEL”) does not preclude constructive dismissal lawsuits. A new case released this week, however, has determined the exact opposite: that is, the IDEL does in fact preclude lawsuits for constructive dismissal.
What does this newest case mean for Ontario businesses?
Unless Ontario’s Court of Appeal rules on this issue, employers are unfortunately left with two conflicting interpretations of the law. Although the judge in the newest decision expressly stated that the older decision was wrong at law, both cases were lower court decisions and, neither has authority to overrule the other.
That said, there is reason for cautioned optimism for employers. The new decision provided a final determination on the issue, unlike the older case which is still proceeding through the court system. Furthermore, the new decision provided a more fulsome and robust analysis of why the IDEL precludes constructive dismissal lawsuits, whereas, in comparison, the older case gave it short shrift.
Can employers now avoid constructive dismissal lawsuits from employees on the IDEL?
The answer remains yes and no, depending upon the express and implied terms of the employment relationship and the parties’ course of conduct. Importantly, any layoff or reduction in wage must still be for reasons related to COVID-19 in order to trigger the IDEL. However, in light of the most recent court decision, organizations are now fortified with well-founded legal arguments and a roadmap of how to defend such a lawsuit. Any employee commencing a lawsuit for constructive dismissal while on the IDEL now risks a successful motion by the employer quickly disposing of the case, with costs.
What should employers do about temporarily laid-off employees?
As of our last writing, the “COVID-19 period” during which employees on the IDEL could not claim constructive dismissal was set to expire on July 3, 2021. On May 29, 2021, the Ontario government extended this period to September 25, 2021, providing employers with more breathing room.
In light of the most recent court decision, increased vaccination rates and the gradual reopening of Ontario, organizations should discuss their plans to recall or dismiss employees, with experienced employment law counsel.
The lawyers at Hyde HR law stay up-to-date on the latest news and developments. Please do not hesitate to contact us for assistance.