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Constructive Dismissals in Ontario and COVID-19 Considerations

The challenges presented by the COVID-19 pandemic has caused many employers to consider difficult choices to maintain the health of their businesses. Some of these decisions could include layoffs, staff reorganization, or even relocation. Whenever changes take place in the workplace environment, employers should always consider the risks involved and how to mitigate them. One of the risks of major changes to the workplace environment is that of a constructive dismissal claim from employees’ whose terms of employment have changed. This article goes over the intricacies of constructive dismissals in Ontario amidst COVID-19, and what employers should consider when it comes to making workplace changes during the pandemic.

Constructive Dismissals in Ontario

Constructive dismissal occurs where the terms of employment are unilaterally and substantively changed that they can be considered a breach of their employment contract. Typically, these claims result from the withdrawal of job duties, poisoned work environments as well as drastic changes to the employment relationship.

Changing Employment Locations and Its Effects

Some employers may decide to relocate during the pandemic to cut costs and minimize risk of illness. Shifting operations to a new location can create risk of a constructive dismissal claim if employees will be required to commute to the new location.

When determining whether a constructive dismissal has taken place, a court will first examine the employment contract to determine whether the contract entitles an employer to transfer its employees between geographic areas. Other factors of employment such as norms of the industry or the existence of multiple branches of the business, but ensuring that the employment contract allows for flexibility in the employment relationship is effective in managing major changes.

Businesses should also consider the reasonableness of any transfer such as the distance from the original location. The cases are mixed where some cases that showed a transfer of two hours away was acceptable whereas others showing a transfer of 1.5 hours away was deemed to be unreasonable. Commuting distance, service time and uprooting of families may also apply.

Remote Working As A Changing Condition

The socially-distanced reality of the pandemic has also caused many employers to implement work from home measures or telecommuting to ensure the health and safety of employees and the business. Employers should take care in how remote work is put in place and what information is monitored.

Remote-working software may offer employers powerful means to monitor employees through cameras, microphones and even usage histories on work devices. The extent of the information collected should be extensively documented through an employer’s policies and businesses should always consult with legal counsel prior to implementing new employee monitoring measures.

Secret surveillance of employees in the workplace can have the effect of poisoning the work environment such that employers can be vulnerable to constructive dismissal claims.

In the case of Colwell v. Cornerstone Properties Inc., 2008 CanLII 66139 the Superior Court found that an employee was constructively dismissed when she discovered that she was being secretly recorded by her employer to detect potential theft. The Court held that the surveillance was a violation of the implied contractual duty of good faith and fair dealing. Similarly, employers implementing solutions to monitor employees whilst they work from home should be transparent with the degree to which information is recorded and employees’ performance monitored.

Layoffs Due To Lack of Work

During pandemic-related slowdowns, businesses may be pressured to reduce their staffing for the purposes of conserving funds. The Ontario government enacted regulation 228/20: Infectious Disease Emergency Leave which protect the jobs of employees who are laid off due to COVID-19 and protects employers from potential claims of constructive dismissal in Ontario.

Ordinarily, when employment contracts do not clearly allow employers to lay off employees, a layoff is considered a constructive dismissal. The regulation now requires that employees whose hours are reduced or those who are laid off due to the pandemic are deemed to be on Infectious Disease Emergency Leave until they are returned to work or six weeks after the declared emergency ends.

No cases are currently available which confirm whether these regulations apply to employees who are entitled to claim constructive dismissal in Ontario at common law but future decisions will likely clarify the issue.

Conclusion

There are multiple ways in which employers can mitigate the risks of constructive dismissals in Ontario during the COVID-19 pandemic. They can refrain from broad-reaching, unilateral changes to employment contracts, they can implement comprehensive policies concerning remote working and some will be able to rely on Infectious Disease Emergency Leave regulations to manage their workforce. Whenever businesses are considering major changes to their workforce, it is best to consult with competent legal professionals who can help to mitigate anticipated and unanticipated liabilities.

Contact Us

If you are an employer contemplating major changes to your workforce during the COVID-19 pandemic, or an employee who believes you have been constructively dismissed in Ontario, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at 1 (800) 771-7882 or email us at [email protected] and we would be happy to assist.

If you are a small or medium-sized company looking for full-service support, visit our CLO program page for our strategic solutions.