As 2021 draws to a close, we reflect on the employment law decisions that were released over the past year. Below is a high-level overview of the key aspects of five notable case law developments in 2021 that all employers and employees should know about.
1. The IDEL Cases
In May 2021, the Ontario government introduced legislation, Regulation 228/20 (“IDEL Regulation”), in response to the hundreds of thousands of employees being laid off due to the COVID-19 pandemic. The IDEL Regulation amended Ontario’s Employment Standards Act, 2000 (“ESA” or “the Act”) by exempting employees who had their hours of work or wages temporarily reduced due to the pandemic during the COVID-19 period (March 1, 2020 – July 30, 2022) (“COVID Layoff”) from the application of the ESA’s temporary layoff and constructive dismissal provisions. Normally, under the ESA, a temporary layoff is considered a constructive dismissal if certain criteria are met, triggering statutory termination and possibly severance payments. The Regulation’s exemption from these provisions meant that a COVID Layoff would not be treated as a layoff or constructive dismissal under the ESA. Instead, the IDEL Regulation stated that a COVID Layoff was a job-protected leave of absence from work.
While the IDEL Regulation spoke to how COVID Layoffs were to be regarded under the ESA, it remained unclear if, and how, the Regulation would impact an employee’s ability to claim constructive dismissal under the common law.
Coutinho v. Ocular Health Centre Ltd, 2021 ONSC 3076 (“Coutinho”) was the first decision answering that question. The court in that case held that the IDEL Regulation did not preclude an employee from claiming a COVID Layoff was a constructive dismissal under the common law. In so finding, the court relied on section 8(1) of the Act, which states that “no civil remedy of an employee against his or her employer is affected by this Act”. Under the common law, the layoff constituted constructive dismissal and pay in lieu of reasonable notice was awarded to the employee accordingly.
Shortly after Coutinho was released, the court in Fogelman v. IFG, 2021 ONSC 4042 (“Fogelman”) not only reaffirmed Coutinho’s findings, but went further: in addition to awarding pay in lieu of notice for the constructive dismissal, the court ordered the employer to pay $25,000 in punitive damages for failing to pay the employee his ESA entitlements upon his constructive dismissal. This aspect of the case is particularly interesting because it means employers may be held liable for additional damages, over and above severance payments, if they do not immediately treat a COVID Layoff as a constructive dismissal under the ESA. This seems to be contrary to the IDEL Regulation’s treatment of a COVID Layoff as a leave rather than a constructive dismissal.
Shortly after Fogelman, the court in Taylor v. Hanley Hospitality Inc, 2021 ONSC 3135 (“Taylor”) refused to follow Coutinho and Fogelman and, instead, found that a COVID Layoff did not constitute constructive dismissal under the common law. The court explained that the IDEL Regulation, in deeming COVID Layoffs as job-protected leaves rendered common law principles relating to layoffs inapplicable and irrelevant. The decisions in Coutinho and Fogelman ought not be followed, as they made the IDEL Regulation meaningless and the courts’ analyses surrounding section 8(1) of the Act was not based on precedent.
So, there are now conflicting decisions on the question of whether a COVID Layoff can amount to a constructive dismissal under the common law. Taylor is being appealed to the Court of Appeal and the implications of an appellate decision will be far-reaching. If the Court of Appeal finds that COVID Layoffs are indeed constructive dismissals, employers could be held liable for paying severance – and potentially punitive damages – to employees who were temporarily laid off during the pandemic.
For more on this topic, see our previous blog post here.
2. The Vaccination Cases
Under Ontario’s Occupational Health and Safety Act (“OHSA”), employers are required to “take every precaution reasonable in the circumstances for the protection of a worker”. The question of whether that includes mandating vaccinations against COVID-19 in the workplace has been the subject of legal debate. Three recent arbitration decisions – although related to the non-unionized work environments – provide some judicial guidance on the matter.
United Food and Commercial Workers Union, Canada Local 333 v. Paragon Protection Ltd. (“Paragon”) and Ontario Power Generation v. The Power Workers Union (“OPG”) are cases where mandatory vaccination policies were found to be enforceable on the grounds that they constituted reasonable precautions for the employer to take to protect their workers under the OHSA. In Paragon, the policy was applied to security guards who worked at third party work sites during the pandemic and, in OPG, to workers who wanted access to the office gym. The risk for transmission of COVID-19 was considered high enough in these cases to justify the employer implementing mandatory vaccination policies.
On the other hand, the arbitrator in Electrical Safety Authority v. Power Workers Union (“Electrical Safety”) came to the opposite conclusion surrounding a policy requiring employees who were unvaccinated (or refused to disclose their vaccination status) submit to regular COVID-19 testing (“Testing Policy”). Such a policy was considered unreasonable and unenforceable because workers were mostly working at home and therefore did not present a significant risk of transmitting COVID-19 to other workers. Since the workplace was not a particularly high risk setting and other less intrusive policies could sufficiently protect workers, the Testing Policy was considered an unjustified encroachment upon individual rights and therefore unenforceable.
While these cases are not authoritative law in the non-unionized environment, their analyses will likely be similar to how courts will approach the question of whether mandatory vaccination policies are enforceable against non-unionized workers. As we can see from these cases, answering that question involves proving how such a policy is necessary to prevent COVID-19 transmission in the specific workplace in question, which is a highly fact and context specific exercise.
For more on this topic, see our previous blog post here.
Part 2 of this blog post can be found here.