Introduction
Facts
Decision
Comment


Introduction

Contradicting a case decided just months earlier, the Superior Court of Justice in Taylor v Hanley Hospitality Inc, 2021 ONSC 3135 (Hanley Hospitality) has determined that an employee who is deemed to be on infectious disease emergency leave (IDEL) under the Employment Standards Act 2000 (ESA) cannot claim constructive dismissal under the common law.

Employers will recall that Ontario Regulation 228/20: Infectious Disease Emergency Leave (the IDEL Regulation) under the ESA, which has been in force since 1 March 2020 and has most recently been extended to 25 September 2021, provides that employees who have been temporarily laid off are deemed to be on protected emergency leave and are not considered laid off or constructively dismissed under the provisions of the ESA.

Facts

In Hanley Hospitality, the plaintiff worked for a franchise that was operated by the defendant. On 27 March 2020, the plaintiff was temporarily laid off from her employment owing to the covid-19 pandemic. As a result of the IDEL Regulation, the plaintiff was statutorily deemed to be on protected emergency leave.

The plaintiff was notified on 18 August 2020 that she would be required to return to her employment on 3 September 2020. The plaintiff returned to work on 3 September 2020 but nonetheless pursued her claim of constructive dismissal.

The defendant brought a motion to dismiss the plaintiff's claim on the basis that the plaintiff could not have been constructively dismissed by virtue of the IDEL Regulation. At the time of the hearing in April 2021, the plaintiff was still employed by the defendant.

Decision

In her decision, Justice Ferguson of the Ontario Superior Court of Justice reviewed the IDEL Regulation and agreed with the defendant: the IDEL Regulation removed the plaintiff's right to claim constructive dismissal at common law. As a result, Justice Ferguson dismissed the plaintiff's claim in its entirety.

Justice Ferguson provided numerous reasons in support of her decision to dismiss the plaintiff's claim. First, she found that it offended the rules of statutory interpretation to give the IDEL Regulation an interpretation that rendered it meaningless. In other words, if the IDEL Regulation still allowed for a plaintiff to claim constructive dismissal under the common law, then it was ineffectual in providing relief to employers during the covid-19 pandemic, which was its intention when it was originally introduced by the Ontario government.

Second, Justice Ferguson found that it would be an absurd result if an employee could be on a leave of absence for the purposes of the ESA yet be terminated (or constructively dismissed) for the purposes of the common law.

Third, Justice Ferguson noted that the covid-19 pandemic was an exceptional situation that called for exceptional measures. In her view, the Ontario government implemented the IDEL Regulation as a proportionate response to the pandemic in recognition of the fact that it would be unfair to hold employers responsible for wrongful dismissal claims as a result of a declared state of emergency that forced businesses to close.

Comment

Justice Ferguson's findings in Hanley Hospitality are in direct contrast to the decision of Justice Broad in Coutinho v Ocular Health Centre Ltd, 2021 ONSC 3076 (Ocular Health), which was released in April 2021. In that decision, Justice Broad determined that IDEL did not remove a plaintiff's right to claim constructive dismissal under the common law.

In reaching her conclusions, Justice Ferguson was mindful of the contradiction between her findings and that of Justice Broad in Ocular Health, noting, respectfully, that Ocular Health was wrong in law and the court should not be bound by it.

Given the significance of the IDEL Regulation and the conflict in findings between Hanley Hospitality and Ocular Health, the Ontario Court of Appeal will be expected to make a final determination on this issue. Several significant items are likely to be canvassed on appeal, including whether the IDEL Regulation can oust common law entitlements in the same way that the ESA may be able to. The Ontario Court of Appeal may also have to consider whether it agrees with Justice Ferguson's finding in Hanley Hospitality that "exceptional situations call for exceptional measures".

For further information on this topic please contact Lisa Cabel, Richelle Pollard or Norm Keith at KPMG Law by telephone (+1 416 777 8000‚Äč) or email ([email protected], [email protected] or [email protected]). The KPMG Law website can be accessed at www.kpmg.com.