On June 7, 2021, the Ontario Superior Court of Justice released a new decision, Taylor v. Hanley Hospitality Inc., 2021 ONSC 3135, related to an employer’s ability to place employees on temporary layoff during the COVID-19 pandemic. The Government of Ontario had previously introduced Infectious Disease Emergency Leave as a proscribed leave under the Employment Standards Act. The Government of Ontario’s intention was to provide employers with the ability to place employees on job protected Infectious Disease Emergency Leave to protect against constructive dismissals. As such, the new ruling by the Ontario Superior Court of Justice is extremely important and relevant to employers across the province.

Background of the Case 

The Plaintiff employee in Taylor v Hanley Hospitality Inc. had been placed on temporary layoff by the Defendant employer. The employee then brought a claim against the employer for constructive dismissal over the amount of time the employee had been placed on layoff. The employer then brought a motion to strike the claim.

The Decision 

The Ontario Superior Court of Justice ruled in favour of the employer and determined the employee had been placed on Infectious Disease Emergency Leave. As such, the employee had not suffered a constructive dismissal considering the reduction in the employee’s hours were related to COVID-19, a deemed infectious disease. The Court looked at the intention of the Government of Ontario and ruled in a manner that would not make its legislation, which was an attempt to protect employers from constructive dismissal claims related to COVID-19 layoffs, useless.

Specifically, the Court affirmed that the Employment Standards Act displaces the common law on this issue and in fact applies to layoffs related to COVID-19, even where the employer did not specifically place the employee on Infectious Disease Emergency Leave.

Relationship with Previous Decisions

We wrote an article about a previous decision in May, where the Court’s decision in Taylor v Hanley Hospitality Inc. stands in direct contradiction to its decision earlier this year in Coutinho v Ocular Health Centre 2021 ONSC 3076. In Coutinho v Ocular Health Centre, the Court determined that employees could brings claims for constructive dismissal against their employers for layoffs related to COVID-19. In reaching this decision, the Court referenced section 8(1) of the Employment Standards Act which specifies “no civil remedy of an employee against his or her employer is affected by this Act”. Which meant that employees were able to claim constructive dismissal at common law.

Considering the contradictory nature of the two cases both related to the same situation, it may fall to a higher court such as the Ontario Court of Appeal to provide clarity on this outstanding question.

Takeaway for Employers

Employers should be cautious at this time given the conflicting case law surrounding COVID-19 related layoffs. Until the question of temporary layoffs during COVID-19 is settled, employers can not be sure as to whether their actions are placing them at risk of liability for damages or not. Employers should be sure to consult with an employment lawyer before taking action related to temporary layoffs during COVID-19.

Contact Us

If you are an employer and have questions pertaining to placing employees on temporary layoff, or an employee who believes you’ve been constructively dismissed, 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.