140Law: Here are our Top 10 legal headlines for the week of June 30, 2020.
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
Tuesday, June 30, 2020
Monday, June 29, 2020
140Law: Legal Headlines for the week of June 29, 2020
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
Monday, June 22, 2020
140Law: Top 10 Legal Headlines for the Week of June 22, 2020
140Law: Here are our Top 10 legal headlines for the week of June 22, 2020.
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
140Law: Legal Headlines for the week of June 22, 2020
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
Monday, June 15, 2020
140Law: Top 10 Legal Headlines for the Week of June 15, 2020
140Law: Here are our Top 10 legal headlines for the week of June 15, 2020.
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
140Law: Legal Headlines for the week of June 15, 2020
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
Monday, June 08, 2020
140Law: Top 10 Legal Headlines for the Week of June 8, 2020
140Law: Here are our Top 10 legal headlines for the week of June 8, 2020.
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
140Law: Legal Headlines for the week of June 8, 2020
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
Friday, June 05, 2020
Statutory Layoffs, Constructive Dismissal and Covid-19
BY SIMRAN BAKSHI, ASSOCIATE LAWYER
Consider the actions that have been necessary in the employment law context.
With businesses across the province forced to shut down with little to no notice, many employers have had to make the difficult decision to lay off or downsize their workforce to stay financially afloat.
While in the normal course, such actions would be governed by the Employment Standards Act (ESA) and the common law, there are real questions in these unusal, pandemic times about whether the applicable laws will change or be re-interpreted.
It is generally settled law that despite the ESA's explicit layoff provisions, at common law, an employer in Ontario is not permitted to temporarily lay off an employee unless there is an employment contract permitting such action, or implied or express acceptance by the employee.
If the employer nonetheless imposes a layoff, the employee can treat such action as a constructive dismissal of her employment, and seek common law notice entitlements in a court acion for damages.
As the Ontario Court of Appeal affirmed in Elsegood v Cambridge Spring Service 2001 Ltd., 2011 ONCA 831 (CanLII):
To put this in context, as a result of Covid-19 closures, thousands of business across Ontario may have inadvertently severed their employment relationships with their employees, making them liable to pay hefty severance packages or damages awards.
The million dollar question remains, will our courts really allow this to happen, or will exceptions be made in interpreting the usual law of layoffs, in order to address the present reality?
As the Ontario Court of Appeal affirmed in Elsegood v Cambridge Spring Service 2001 Ltd., 2011 ONCA 831 (CanLII):
[14] At common law, an employer has no right to lay off an employee. Absent an agreement to the contrary, a unilateral layoff by an employer is a substantial change in the employee's employment, and would be a constructive dismissal.If the usual law is strictly applied to Covid times, any employer who has laid off employees to comply with the state of emergency may have constructively dismissed the laid off employees, unless the employer is relying on a layoff provision in an employment contract, or it has the employee’s consent.
To put this in context, as a result of Covid-19 closures, thousands of business across Ontario may have inadvertently severed their employment relationships with their employees, making them liable to pay hefty severance packages or damages awards.
The million dollar question remains, will our courts really allow this to happen, or will exceptions be made in interpreting the usual law of layoffs, in order to address the present reality?
Ontario Regulation 228/20, enacted by the Ford government on May 29, 2020, seems to signal that a new approach to Covid-related employment law claims may emerge.
This Regulation amends the Employment Standards Act to retroactively deem employees whose hours or wages have been temporarily reduced or eliminated due to Covid-19 to be on an infectious disease emergency leave, as opposed to being subject to a statutory layoff or constructive dismissal.
It further deems that complaints filed with the Ministry on this basis as not having been filed at all, and protects employers from statutory termination and severance pay obligations otherwise arising from unlawful layoffs that may otherwise have given rise to constructive dismissal.
The Regulation, however, does not address the common law of constructive dismissal, nor does it bar an employee from bringing a civil claim for damages for constructive dismissal.
The Regulation, however, does not address the common law of constructive dismissal, nor does it bar an employee from bringing a civil claim for damages for constructive dismissal.
That, of course, brings us back to the question of what Ontario's Courts are likely to do with such claims
It would not be surprising if the Courts take a cue from the Ford government, finding that temporary layoffs necessitated by Covid-19 did not amount to a constructive dismissal.
On the other hand, such an approach would eliminate an employee’s choice to assess whether an employment relationship has truly been severed. This will not always lead to a fair outcome. Legal advice should be obtained as to your rights and entitlements, if you wish to consider advancing a constructive dismissal claim.
It would not be surprising if the Courts take a cue from the Ford government, finding that temporary layoffs necessitated by Covid-19 did not amount to a constructive dismissal.
The concern is that if employers are held liable for unlawful layoffs relating to Covid-19, there will be a floodgate of claims before the court, with a domino effect to follow of permanent business closures and bankruptcies. From a policy perspective, limiting constructive dismissal claims, at least temporarily, would provide much needed economic relief and stability, particularly to small and medium sized businesses that are otherwise on the brink of financial ruin.
On the other hand, such an approach would eliminate an employee’s choice to assess whether an employment relationship has truly been severed. This will not always lead to a fair outcome. Legal advice should be obtained as to your rights and entitlements, if you wish to consider advancing a constructive dismissal claim.
Many employees will be keen to return to work, irrespective of whether a Covid-19 layoff was technically sound. It may only be in circumstances wherein an employment relationship already stood on shaky ground that a layoff will be challenged.
Even then, the context in which the layoff occurred will almost certainly be taken into account.
Going back to the basics, the act of unilaterally laying off an employee has typically been considered a constructive dismissal because it repudiates the expectation of continued paid employment. There can be no such expectation if an employer is mandated by law to temporarily shut down its business due to the pandemic. The same cannot be said however, for an employer who seeks to take advantage of circumstances.
Our courts have always favoured a balanced approach when faced with competing interests and concerns.
Perhaps the most likely outcome is for the court to leave the door slightly ajar for exceptional claims of constructive dismissal, which arise during the Covid-19 period, looking closely at the actions and motivation of the parties.
Going back to the basics, the act of unilaterally laying off an employee has typically been considered a constructive dismissal because it repudiates the expectation of continued paid employment. There can be no such expectation if an employer is mandated by law to temporarily shut down its business due to the pandemic. The same cannot be said however, for an employer who seeks to take advantage of circumstances.
Our courts have always favoured a balanced approach when faced with competing interests and concerns.
Perhaps the most likely outcome is for the court to leave the door slightly ajar for exceptional claims of constructive dismissal, which arise during the Covid-19 period, looking closely at the actions and motivation of the parties.
- Simran Bakshi, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
Monday, June 01, 2020
140Law: Top 10 Legal Headlines for the Week of June 1, 2020
140Law: Here are our Top 10 legal headlines for the week of June 1, 2020.
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
140Law: Legal Headlines for the week of June 1, 2020
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
Sunday, May 31, 2020
Ford Government: Ontario's 13-Week Layoff Limit Eliminated During COVID Emergency
The Ford Government has made a crucial, temporary change to Ontario's Employment Standards Act (ESA) that will impact countless employers and employees in the Province.By operation of Ontario Regulation 228/20, published on May 29, 2020, the ordinary 13-week limit on the duration of workplace layoffs has effectively been suspended. This time-limit will not apply to employees who have been laid off due to COVID-related slowdowns and closures.
The Regulation will apply from March 1, 2020 until six-weeks after the Government ends its March 17 emergency COVID-19 declaration. It repesents a significant change that many employers have been clamouring for.
Ordinarily, where an employee is not recalled from a layoff within 13 weeks, the layoff is deemed to be a termination of employment by operation of section 56 (2)(a) of the ESA.
There are certain exceptions in the Act to this deemed termination rule. These occur:
- Where the extended layoff is less than 35 weeks in any period of 52 consecutive weeks, and
- The employee continues to receive substantial payments from the employer and
- The employer continues benefit payments for the employee.
In addition, the Regulation provides that no COVID-related reductions in employees' hours or compensation on or after March 1, 2020 will be treated as a constructive dismissal under the Act.
Many Ontario workplaces that are still closed due to COVID would have been approaching the statutory, 13-week layoff limit within the next week or two.
There was great concern among small employers and profesional practices, in particular, that they would face enormous, mandatory severance obligations to multiple employees at once at the end of the 13 week layoff period, even if they were still unable to open.
For some employers, such severance obligations could have become bankruptcy-triggering events.
As examples, most restaurants and mall-based retail outlets are not yet legally permitted to fully reopen, and after months of closure and partial-closures due the the Emergency Declaration, many could not possibly have withstood the costs of mandatory notice and severance obligations.
Similarly, many Ontario dentists - who until changes announced May 31 remained subject to significant regulatory restrictions that prevented them from providing non-urgent care, seeing recall patients or offering dental hygiene services - have simply been unable to re-open or to recall employees, given the potentially low demand for the few services they had been able to provide.
While some have argued that this Regulation represents a major blow for employees, I'm not pursuaded that there is much truth to that.
With the elimination of the 13-week layoff limit, employees ultimately get some degree of job protection. They will not automatically be deemed to be terminated. Many love their jobs and are chomping at their collective bits to get back to work, as soon as possible. They are prepared to work collaboratively with their employers toward re-opening and do not want to be automatically dismissed by operation of the ESA.
For those that ultimately will not be returning, their entitlements to notice and severance have been delayed, not eliminated. Most are currently receiving EI or other government benefits, in the interim. That's not a perfect solution, of course, and the uncertainty about the future remains.
Without this Regulation, however, many workplaces faced a serious risk of insolvency and closure due to notice and other statutory obligations, alone. This legislation temporarily removes that immediate risk, and gives employers additional time to get back on their financial feet so that jobs can be preserved.
Beyond that, this Regulation 228/20 gives employers and employees the flexibiity - with mitigated legal risk - to implement the gradual, staged approach to re-opending mandated by the Province and by public health authorities.
COVID closures were not the fault of employers or employees. This Regulation appears to be a fair effort to share the burden, balance the respective interests and at very least, to buy some much needed time.
As a final note, while the Regulation addresses the statutory standards set out in the ESA, it does not at first glance appear to impact or preclude Court-based claims for damages for wrongful dismissal or constructive dismissal. This is particularly important for those employees who did not expressly agree to their current layoffs and those who have not signed valid employment agreements that permit such layoffs.
It should also be noted that his new Regulation will not be applicable to those whose workplaces reduce hours or compensation for discriminatory or improper reasons that are unrelated to COVID, or to employers that otherwise go rogue.
As always, there remains uncertainty as to how the Courts will ultimately address such claims. Legal advice should be obtained by any employee with concerns related to COVID in the workpace.
To arrange a consultation with a Wise Law workplace and employment lawyer, click here.
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
Monday, May 25, 2020
140Law: Legal Headlines for the week of May 25, 2020
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net
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