As we leave behind 2022, the long shadow of COVID-19 continues to linger and may have changed our workplaces forever.

Perhaps the most significant workplace trend with long term effects on employers is remote work.  Given how it proved to be a viable option for many workplaces over the pandemic, as workplaces started opening in late 2022, employees are demanding the ability to work from home at least some of the time.  As employers navigate this option, legal risk factors include how to record and determine working hours and overtime, how remote work will affect employees’ right to disconnect, and how privacy issues intersect with an employer’s electronic monitoring.

Against that backdrop, below are important employment law developments we saw in 2022 for Ontario employers, and what that could mean in 2023.

Employment Development #1: IDEL and Constructive Dismissal Claims

As of July 30, 2022, employers can no longer rely on the Infectious Disease Emergency Leave regulation (“IDEL”) to put employees on indefinite leave.  After that date, employers could rely on the ESA temporary layoff provisions to further delay their employees’ return to work.

However, it remains unclear whether employers who had put employees on IDEL are at risk of a successful constructive dismissal claim.  Given conflicting lower court decisions in Coutinho v Ocular Health Centre Ltd., 2021 ONSC 3076, Fogelman v. IFG, 2021 ONSC 4042, and Taylor v. Hanley Hospitality Inc. (Taylor), 2021 ONSC 3135, the latter’s appeal to the Ontario Court of Appeal was expected to give us clear guidance in 2022.  Instead, the Court of Appeal in Taylor v. Hanley Hospitality Inc., 2022 ONCA 376 ultimately decided the appeal without deciding this issue.

We can look forward to more definitive direction from a Superior Court or an appellate court decision in 2023.

Employment Development #2: Termination or layoff due to non-compliance with vaccination policies

Throughout 2022, mandatory vaccination policies in the workplace were a notable topic of discussion.  As the vaccination rate among Canadians is high and COVID-19-related restrictions have lifted, it may become increasingly difficult in many workplaces to justify a mandatory full vaccination policy in 2023.

Past cases, generally decided in labour relations cases by arbitrators, tended to uphold an employer’s right to have a mandatory full vaccination policy.  These cases were decided during the peak of the pandemic when the vaccination rate was not high enough, and old variants were more deadly than new ones.

Those trends started to change by mid-2022.  For instance, in July 2022, the arbitrator in FCA Canada Inc. v Unifor, Locals 195, 444, 1285, 2022 CanLII 52913 (ON LA), held that a two-dose requirement was reasonable when it was initially introduced, but was no longer reasonable as of the date when the decision issued. In Toronto Professional Fire Fighters’ Association, I.A.A.F. Local 3888 v Toronto (City), 2022 CanLII 78809 (ON LA), the arbitrator upheld the mandatory vaccination policy requiring two doses as reasonable, but found that the enforcement mechanisms of disciplinary suspensions and discharge for non-compliance were unreasonable.

While different considerations will be at play in the non-unionized context, we can expect more labour relations decisions in 2023 that will temper the reasonableness of a mandatory full vaccination policy.  Employers will continue to face uncertainty and risk if they decide to terminate employees due to non-compliance with mandatory vaccination policies, as the cases will likely be decided on a case-by-case basis.

Employment Development #3: Electronic monitoring policies put transparency first

Privacy rights are a growing concern especially as employers incorporate permanent remote work and hybrid work models. Government is responding to employee concerns with legislation forcing transparency on employers. For instance, an amendment to the Employment Standards Act, 2000 (“ESA”) on April 11, 2022 requires employers with 25 or more employees on January 1 of any year  to have a written policy in place by March 1 of that year on the electronic monitoring of employees.

The policy must include:

• A description of how and in what circumstances the employer may electronically monitor employees.
• The purposes for which the information obtained through electronic monitoring may be used by the employer.
• The date the policy was prepared.
• The date any changes are made to the policy.

Failure to do so may result in complaints to, and investigations by, the labour division of Ontario’s Ministry of Labour, Immigration, Training and Skills Development. As noted in our article Ontario Electronic Monitoring Policy Due by October 11, 2022 this should be reviewed annually.

Employment Development #4: Digital Platform Workers’ Rights Act

The Digital Platform Workers’ Rights Act was passed in April 2022, and we expect that the contemplated amendments to the ESA will be declared in force sometime in 2023.

This Act will apply to digital platforms and their workers, such as DoorDash and Uber and their drivers – the vast majority of whom are currently unprotected as independent contractors.  The changes contemplated will provide all digital platform workers with comprehensive minimum rights to:

• Information (section 7).
• A recurring pay period and pay day (section 8).
• Minimum wage (section 9).
• Amounts earned by the worker and to tips and other gratuities (section 10).
• Notice of removal from an operator’s digital platform (section 11).
• Resolve digital platform work-related disputes in Ontario (section 12).
• Be free from reprisal (section 13).

Digital platforms will need to invest significant time and resources to bring themselves into compliance. They should consider starting as early as possible to avoid risk of financial liability, even before the Act comes into force.

Employment Development #5: Reckless Termination and Discrimination Claim

Employees who have been recklessly terminated may claim significant damages against their employer. In Luckman v. Bell Canada, 2022 CHRT 18, a recent decision of the Canadian Human Rights Tribunal (“CHRT”), the employer, Bell Canada (“Bell“), terminated their employee, Mr. Luckman, citing corporate restructuring.  Bell denied that performance was a reason for his termination.

However, prior to his termination, Mr. Luckman had taken a few medical leaves of absence as he suffered from health issues known to Bell.  On his return from a second medical leave, Bell failed to offer any accommodations, such as a flexible schedule, remote work, or additional resources, to deal with known stresses of his return to work, ultimately affecting his performance.

Bell might have legitimately cited performance issues but provided no evidence that it had tried to manage performance or that the selection process to terminate him as opposed to another employee was based on non-discriminatory grounds.  Rather, the Tribunal found that Bell’s termination was reckless as, even though Mr. Luckman’s medical limitations were known to Bell, Bell offered no accommodation on his return to work, and no one seemed to have “considered whether firing an employee recovering from cancer surgery might be discriminatory.”  For this “reckless termination”, the Tribunal awarded $15,000 in damages for pain and suffering, a further $15,000 for Bell’s wilful and reckless conduct, as well as $91,052.40 for lost wages.

Employers should proceed cautiously when they know, or should know, that there are potential human rights issues in terminating an employee or be at risk of potentially significant financial liability.

Employment Development #6: Removal of Canadian Experience Requirement

Requiring Canadian experience as part of licensing criteria in any of the regulated professions will be deemed void on and after December 1, 2023. This opens up employment and business opportunities to internationally trained professionals. This important development, the result of over a decade of advocacy, arose from Bill 27: Working for Workers Act, 2021, which received royal assent on December 2, 2021.  Strictly speaking, this is not a 2022 development; however, since the Bill grants a 2-year grace period for compliance, over the course of 2022 and into 2023, Ontario regulators of professions will bear the onus of removing the Canadian experience requirements from their licensing criteria, except for public health and safety exemptions.

A list of regulated professions can be found in Schedule 1 of the Fair Access to Regulated Professions and Compulsory Trades Act, 2006, SO 2006, c 31.

Employment Development #7: CERB Not Deductible From Wrongful Dismissal Damages

In Yates v. Langley Motor Sport Centre Ltd., 2022 BCCA 398, the British Columbia Court of Appeal overturned a lower court’s decision and ruled that the Canada Emergency Response Benefit program (“CERB”) benefits received during the termination notice period is not deductible from the wrongful dismissal damages. The Court of Appeal noted that broader policy considerations and the purpose of the CERB program, designed to support employees but not to give employers a windfall, support a conclusion that CERB payments should not be deducted from damages awarded.  Whether employees should pay back CERB is an issue between the government and these employees, and not between employees and their employers.

Although not binding other than in British Columbia, this appellate decision is helpful as lower courts across Canada have been divided on this issue.  We may see more appellate decisions that will settle this issue definitively.

Finally, as employment law keeps evolving, and as we emerge from the Covid-19 shadow into transformed workplaces, employers are well-advised to consult regularly with experienced counsel to ensure continuous compliance.

If you were placed on temporary layoff by your employer when the COVID-19 pandemic closures started in March 2020 and you are still not back to work, you have been constructively dismissed. You need to protect your rights immediately before you walk away with nothing.

As of July 30^th, 2022, your employer cannot use the pandemic as an excuse to keep you on long-term leave as part of the Infectious Disease Emergency Leave (“IDEL”). Some employer protections that were put in place during the pandemic are no longer valid. This opens the door to the statutory constructive dismissal under the Ontario Employment Standards Act, 2000 (“ESA”), in addition to common law constructive dismissal claims..

If you are still on temporary layoff your window for common law constructive dismissal claims and wrongful dismissal damages may be closing, which means you will have no option for legal recourse.

When a layoff occurs, there is a two-year limitation period during which an employee can pursue a constructive dismissal claim and wrongful dismissal damages. Although Ontario suspended the running of limitation and time periods in March 2020, effectively extending the limitation period for employment matters between March 16, 2020, and September 14, 2020, by six months, now is the time to act. More urgently, the court may also consider your inaction as acquiescence, which leaves you with a much shorter window to act, especially when you have not protested against the layoff.

Did your employer have the right to lay you off?

Most employees believe incorrectly that their employer can place them on temporary leave. Generally, employers are not permitted to do so absent a specific term in the employment agreement permitting them to lay off employees. If your employer laid you off, in the vast majority of cases, this would change a fundamental term of your employment. As such, you have been terminated and you are due severance and termination pay.

The question of whether the IDEL protects employers from constructive dismissal claims is making its way through the courts. The decisions in Coutinho v Ocular Health Centre Ltd.,  and Fogelman v IFG state that the IDEL did not restrict an employee’s common law right to treat a temporary layoff as a constructive dismissal and that the IDEL only covered terminations under the ESA. However, in June 2021, Taylor v Hanley Hospitality Inc., (“Taylor”) the court came to the opposite conclusion, concluding that IDEL displaced the common law and, therefore, limited a plaintiff’s common law right to treat a temporary layoff as a constructive dismissal. We understand that Ontario’s Court of Appeal has set aside the Taylor case’s order on other grounds and remitted it back for reconsideration, so there may be better guidance following the decision on this issue. In our experience, many employers are willing to negotiate a severance package, rather than rely on Taylor.

Your actions matter more than you think

As briefly mentioned above, you should also be aware that the longer you wait to dispute a temporary lay off, the larger the risk that you will be considered to have accepted it by acquiescence. For example, for employees who have been laid off since May 2020, their employer has a strong argument that they have accepted the change to the employment relationship and have not been constructively dismissed.

In addition, asserting constructive dismissal as of the date of temporary layoff can cause other issues. The employer may seek to have any wrongful dismissal damages reduced by the amount of benefits, such as CERB, that you may have received during the layoff period. Courts in Ontario have stated that CERB should not be deducted from wrongful dismissal damages, but courts in other jurisdictions have said otherwise.

What you need to do next

We recommend pursuing severance now to avoid the risk that you would be viewed to have accepted the layoff. We advise you consult an employment lawyer immediately.

You must act now if you wish to pursue wrongful dismissal damages. If you wait to act you will likely not get the outcome you want if the limitation period for your claim has expired, or your employer can establish you have accepted the lay off.

Ontario’s deemed Infectious Disease Emergency Leave (“Deemed IDEL“) period ended on July 30^th, 2022. This does not affect employees’ entitlement and employers are being held accountable and successfully sued for constructive dismissal for their employees.

Employers who relied on IDEL to put employees on leave are at immediate risk of substantial cost, as employees who are not returned to work can sue for constructive dismissal. And as a result of the Waksdale decision most contracts written before June 6 2020 are invalid. In practical terms, most employees with long term records of employment may be due up to 2 years, or, on average, 1 month per year of service under common law.

Leaving employees on indefinite leave has costly consequences when constructive dismissal is alleged.  It is important to seek advice from experienced counsel to craft a strategy to mitigate, if not eliminate, these liabilities.

Deemed IDEL came into being during the pandemic to provide relief to both employees and employers. For employers, Deemed IDEL was intended as a relief measure. Under certain circumstances, IDEL allowed for temporary reduction or elimination of employee hours and wages, without triggering a deemed termination, but with an obligation for the employer to return the employee to work after the end of the IDEL period. With the Deemed IDEL period ended, employers can no longer place their employees on leave indefinitely, even if the pandemic still impacts their business. that the Deemed IDEL period has ended, employers may still rely on temporary layoff provisions in Ontario’s Employment Standards Act (“ESA”) to continue to place employees on leave. However, there are significant restrictions on the length of temporary layoffs. A breach of these restrictions might be deemed as constructive dismissals under the ESA, and employees might be entitled to termination pay and other provisions if they claim constructive dismissal.

What should you do if your employees were on IDEL past July 30^th?

Employers who currently have employees on IDEL will need to decide whether to call these employees back to work, rely on ESA temporary layoff provisions to extend the time before calling them back to work, or terminate them to avoid a breach of the ESA. (Depending on whether employees’ benefits are continued or not during the layoff, there are two-time limits under the ESA for temporary layoffs.

What employers should know about temporary layoffs moving forward

The ESA does not create a right for the employer to temporarily lay off its employees, but sets the conditions for and duration of layoffs. However, unless an employer has the contractual right to do so, employees put on temporary layoff can claim constructive dismissal, notwithstanding the ESA temporary layoff provisions. Employers are warned to closely comply with the conditions for temporary layoffs to avoid potential costly claims.

Put simply, act now.

Many employees were placed on temporary layoff by their employers when the COVID-19 pandemic closures started in March 2020. If you are still on temporary layoff your window for constructive dismissal claims and wrongful dismissal damages may be closing, which means you will have no option for legal recourse.

When a layoff occurs, there is a two-year limitation period during which an employee can pursue a constructive dismissal claim and wrongful dismissal damages. Although Ontario suspended the running of limitation and time periods in March 2020, effectively extending the limitation period for employment matters between March 16, 2020, and September 14, 2020, by six months, now is the time to act.

Did your employer have the right to lay you off?

Most employees believe incorrectly that their employer can place them on temporary leave. Generally, employers are not permitted to do so absent a specific term in the employment agreement permitting them to lay off employees. If your employer laid you off, in the vast majority of cases, this would change a fundamental term of your employment. As such, you have been terminated and you are due severance and termination pay.

The question of whether the Infectious Disease Emergency Leave (“IDEL”) protects employers from constructive dismissal claims is making its way through the courts. The decisions in Coutinho v Ocular Health Centre Ltd.,  and Fogelman v IFG state that that the IDEL did not restrict an employee’s common law right to treat a temporary layoff as a constructive dismissal and that the IDEL only covered terminations under the ESA. However, in June 2021, Taylor v Hanley Hospitality Inc., (“Taylor”) the court came to the opposite conclusion, concluding that IDEL displaced the common law and, therefore, limited a plaintiff’s common law right to treat a temporary layoff as a constructive dismissal. We understand that the Taylor case is under appeal to Ontario’s Court of Appeal, so there may be better guidance following the decision on this issue. In our experience, many employers are willing to negotiate a severance package, rather than rely on Taylor.

Your actions matter more than you think

You should also be aware that the longer you wait to dispute a temporary lay off, the larger the risk that you will be considered to have accepted it. For example, for employees who have been laid off since May 2020, their employer has a strong argument that they have accepted the change to the employment relationship and have not been constructively dismissed.

In addition, asserting constructive dismissal as of the date of temporary layoff can cause other issues. The employer may seek to have any wrongful dismissal damages reduced by the amount of benefits, such as CERB, that you may have received during the layoff period. Courts in Ontario have stated that CERB should not be deducted from wrongful dismissal damages, but courts in other jurisdictions have said otherwise.

What you need to do next

Although IDEL is set to end on July 31, 2022, and employers will no longer be able to rely on it, some employers may attempt to put employees on further leave, rather than terminate employment.

We recommend pursuing severance now to avoid the risk that you would be viewed to have accepted the layoff. We advise you consult an employment lawyer immediately.

You must act now if you wish to pursue wrongful dismissal damages. If you wait to act you will likely not get the outcome you want if the limitation period for your claim has expired, or your employer can establish you have accepted the lay off.

The COVID-19 pandemic has fundamentally changed the workplace and the operation of businesses in Ontario.

For employment lawyers, 2021 will be remembered most significantly for two developments. The first is the provincial government’s implementation of the Infectious Disease Emergency Leave regulation (“IDEL”) and its impact on constructive dismissal claims. Secondly, the development of mandatory vaccination policies in the workplace left employers grappling with the consequences of those refusing to be vaccinated or refusing to disclose their vaccination status. Other important developments relate to common law reasonable notice periods evolving to deal with the impact of COVID-19, and the government’s law relating to the “right to disconnect” and restricting the use of non-competition covenants.

Below are the most important employment developments of 2021, and what they could mean for employers in 2022.

Employment Development #1: IDEL and Constructive Dismissal Claims

Many employers have relied on the IDEL to place employees on leave to protect their businesses during the COVID-19 pandemic. However, many employees and their lawyers questioned whether the IDEL ousts common law claims of constructive dismissal. Specifically, the question is whether the IDEL permits employers to place employees on temporary layoffs as generally temporary layoffs, unless agreed to, are considered constructive dismissal at common law. Coutinho v. Ocular Health Centre Ltd., (“Coutinho”),Taylor v Hanley Hospitality Inc, (“Taylor”), and Fogelman v IFG (“Fogelman”)  wrestled with this issue, and came to opposite conclusions.

In Coutinho, Justice Broad of the Ontario Superior Court (“ONSC”) concluded that the IDEL did not oust the common law and an employee objecting to being put on IDEL could still sue for common law constructive dismissal damages. This was also the case in Fogelman.

On the other hand, in Taylor, Justice Ferguson of the ONSC came to the opposite conclusion, that the plaintiff was barred from suing for constructive dismissal due to the IDEL. This decision has been appealed to the Ontario Court of Appeal (“ONCA”), with the appeal anticipated to be heard in April 2022.

Overall, the controversial IDEL provisions have placed employers in a complicated position if they were forced to lay off or put employees on leave for COVID-19 related business reasons. Can an employee sue for constructive dismissal if put on IDEL?

If so, the potential liability could have serious financial consequences for employers who failed to revise their employment contracts to take into account the Court of Appeal’s June 2020 decision in Waksdale v Swegon North America Inc.(“Waksdale”). This decision likely invalidated many employers’ attempts to limit liability on termination to the minimums under the Employment Standards Act, 2000 (“ESA”).  If the decision in Taylor is overturned on appeal, the failure on the part of smaller employers to update their contracts could change an anticipated maximum of 8 weeks termination pay to over ten times that for longer term employees (up to 26 months or 113 weeks in one case).

Employers can anticipate some clarity on this issue once the Court of Appeal hears and releases its decision in Taylor.

 

Employment Development #2: Termination due to non-compliance with vaccination policies

The question everyone is asking right now is whether an employee can be terminated for cause due to non-compliance with a mandatory vaccination policy.

We have some guidance on this issue from arbitration decisions in unionized workplaces.

In United Food And Commercial Workers Union, Canada Local 333 and Paragon Protection Ltd (“Paragon“), arbitrator Frederick R. Von Veh, upheld the employer’s vaccination policy. He noted that according to their collective agreement, if an employee is assigned to a client site where specific vaccination or inoculation is required, the employee must agree to receive such vaccination or inoculation. The majority of the employer’s clients have also implemented their own vaccination policies. As a result, employees and contractors must be fully vaccinated in order to work or remain working at these client sites. This was a contributing factor for the arbitrator to uphold the mandatory vaccination policy. Paragon proved that the courts could uphold reasonable vaccination policies. However, we should note that the employer, in this case, agreed to an accommodation to move non-vaccinated employees to worksites that did not require vaccination. This accommodation meant avoiding the question of termination for cause due to non-compliance with a vaccination policy.

In another labour arbitration decision, Electrical Safety Authority and Power Workers Union (“PWU”), arbitrator John Stout found the employer’s mandatory vaccination policy, which provided that unvaccinated employees would eventually be disciplined and ultimately discharged for just cause, unreasonable. Unlike in Paragon, the Collective Agreement in this case did not address vaccinations and, specifically, did not require employees to be vaccinated if required by the employer’s client. This factored into Stout’s decision on whether termination was reasonable due to non-compliance with the vaccination policy. Among other things, the arbitrator reasoned that when other reasonable alternatives to mandatory vaccination are available, such as rapid testing, the employer may not be able to justify its mandatory vaccination policy and termination for cause as a result of not following the policy. This decision is significant because it notes that context is extremely important when assessing the reasonableness of a workplace rule or policy that may infringe upon an individual employee’s rights. It also indicates the way the courts may consider these cases in the non-unionized context. Further, this case highlights the fact that the situation is ever evolving, so while the policy is not reasonable now, it could be later.

The above decisions, while in unionized workplaces, will shed some light on non-unionized employees as well. In non-unionized workplaces, some considerations may vary. However, it is expected that the general principles will be similar. So, whether a vaccination mandate that leads to a termination for cause for unvaccinated employees will be upheld will depend on the specific context of the workplace and the policy itself. What we can tell so far is that context is important, and each decision will be approached on a case-by-case basis with no easy answers for employers.

For example, in a case where employees are client-facing, especially if working with vulnerable populations, such as in a long-term care home, termination for cause due to non-compliance with a vaccination policy is likely reasonable. However, if the employee is an IT professional who works remotely, termination for cause for failure to vaccinate would likely be unreasonable.

Employers can anticipate that a decision from a non-unionized workplace will be released sometime in 2022, which will provide guidance on this important issue.

 

Employment Development #3: Working for Workers Act, 2021

Late in the year, on December 2, 2021, Bill 27, Working for Workers Act, 2021 (“Bill 27”) received royal assent. Two of the most noticeable changes made by Bill 27 are employees’ “right to disconnect” and a prohibition on non-compete agreements.

Employers with 25 or more employees will be required to have a written policy with respect to disconnecting from work, and have until June 2, 2022, to do so. The term “disconnecting from work” is defined to mean “not engaging in work-related communications, including emails, telephone calls, video calls, or the sending or reviewing of other messages, so as to be free from the performance of work.” There is a lack of clarity of what this “right to disconnect” actually entails, as the obligation on employers appears to be transparency about work-related communications, and what an employee’s usual work entails.

Bill 27 also prohibits non-compete agreements between employers and employees, with two noted exceptions. The first exception regards the sale (or a lease) of a business. Non-compete agreements between the seller and purchaser may be allowed as a part of the sale where the seller becomes an employee of the purchaser immediately thereafter. The second exception is that a non-compete agreement is not prohibited between an employer and its executives. “Executive” is defined in Bill 27 as “any person who holds the office of chief executive officer, president, chief administrative officer, chief operating officer, chief financial officer, chief information officer, chief legal officer, chief human resources officer or chief corporate development officer, or holds any other chief executive position.”

Employers should note these changes and implement the required written policy before the June 2, 2022, deadline. Further, employers should update their employment contracts to align with Bill 27’s prohibition on non-compete agreements. While executives are an exception to the prohibition on non-compete agreements, it is important to regularly review your non-compete agreements and clauses to ensure they are enforceable.

Employment Development #4: Yee v Hudson’s Bay Company

In 2021, employers were faced with submissions on the part of employee counsel arguing that the pandemic should be a factor leading to an increase in the period of common law reasonable notice.  Based on a review of the cases, whether or not there is such an increase will be determined on a case-to-case basis, and on whether the employee has been able to prove that market conditions for re-employment were affected by the pandemic. Employers should consider the industry in which their business operates and assess whether it is likely that a court would extend the reasonable notice period.

Yee v Hudson’s Bay Company (“Yee”) was the first of a number of cases where the Plaintiff argued that the reasonable notice period should be increased due the pandemic, based on the limited availability of similar employment. In Yee, Justice Dow of the ONSC found that the COVID-19 pandemic’s impact on market conditions was a relevant consideration when determining the reasonable notice period. He awarded 16 months’ reasonable notice for an employee with approximately 12 years of service. However, while Justice Dow acknowledged the pandemic was a relevant consideration, he noted that the Plaintiff was terminated prior to the pandemic. Therefore, the pandemic’s effect on employment opportunities should not attract the same consideration as a termination that occurred during the pandemic. Justice Dow did not explicitly state that the pandemic resulted in him awarding the Plaintiff additional reasonable notice.

In each of Kraft v Firepower Financial Corp. (“Kraft”) and Pavlov v Australian Lamb Company Limited, (“Pavlov”), the former employees were successful and awarded additional pay in lieu of reasonable notice where they had evidence of the pandemic’s impact on their re-employment prospects. In Kraft, the increase was one additional month; however in Pavlov, the reasonable notice period was extended to 10 months for an employee with just under three (3) years service.

 

Employment Development #5: Rahman v Cannon Design Architecture

As previously discussed, the ONCA’s decision in Waksdale rendered the termination provisions of many employment agreements in Ontario unenforceable. It also left employers exposed to an onslaught of costly wrongful dismissal lawsuits.

As a result, the decision in Rahman v. Cannon Design Architecture (“Rahman”) seemed to provide some relief for employers. Justice Dunphy of the ONSC distinguished Rahman from Waksdale, noting both employee and employer in Rahman had equal bargaining power during negotiations. Justice Dunphy noted that the employee was sophisticated and represented by a lawyer during negotiations, and  that each party had a shared a mutual intention to contract out of the ESA.  This decision surprised many employment lawyers, as the termination provisions in the plaintiff’s employment agreement were similar to the termination provisions held to be unenforceable in Ojo v Crystal Claire Cosmetics Inc. (“Ojo”).

Unfortunately for employers, the relief was short-lived, as the decision in Rahman was strongly criticized by Justice Black in Campbell-Givons v. Humber River Hospital (“Campbell-Givons”), who rejected the approach in Rahman, concluding that an illegal provision is illegal and the party’s sophistication is irrelevant.

In our opinion, Rahman is unlikely to be widely followed as the standard. Employers should ensure that their termination provisions are air-tight, regardless of the sophistication of their employees.

 

Employment Development #6: Hawkes v Max Aicher (North America) Limited

Hawkes v Max Aicher (North America) Limited (“Hawkes”) provided some welcome direction to a question that has frustrated employment lawyers and courts for years.

In Hawkes, Justice Dambrot of the ONSC clarified section 61(1) of the ESA, specifically that the $2.5 million payroll for the payment of statutory severance applies to an operation’s global operations, not only their Ontario operations. Therefore, if an employer has a payroll of $2.5 million globally, and employed an employee for more than five years, that employee is at least entitled to statutory severance pay. Employers with national or international business operations can anticipate that employee’s counsel will routinely raise this argument to secure ESA severance payments for their clients.

 

Employment Development #7: Perretta v Rand A Technology Corporation

In Perretta v Rand A Technology Corporation (“Perretta”), Justice Sanfilippo of the ONSC found that an employer cannot rely on a contract to limit an employee’s entitlements at termination where an employer’s post-termination actions show an intention not to be bound by the terms of an employment agreement.

The employer in Perretta refused to provide the employee with the two weeks’ pay in lieu of notice as set out in her employment agreement, unless she first executed a Full and Final Release. The employee stated this action constituted a repudiation of the employment agreement, and that she was entitled to common law damages. Justice Sanfilippo agreed and awarded the employee 6 months’ common law reasonable notice.

This case is a reminder that employers should not insist on a release in exchange for an employee’s contractual entitlements. Failure to provide a contractual entitlement on termination could mean that the employer forgoes the benefit of any valid termination clauses in the agreement.

 

Employment Development #8: Currie v Nylene Canada Inc.

Only in exceptional circumstances will a court award a notice period of more than 24 months. The employee in Currie v Nylene Canada Inc. (“Currie”) presented those exceptional circumstances. The employee, who was 58 at the time of termination, had worked for the employer for almost 39 years in a specialized field, but also had a limited education and skill set.

Justice Smith of the ONSC concluded that the termination amounted to a forced retirement, and therefore justified a reasonable notice period of 26 months. While factual situations like this are likely rare, employers should realistically consider a terminated employee’s likelihood of re-employment before engaging in costly and unsuccessful litigation.

 

Written by Lai-King Hum, Founder Hum Law with assistance from Associates Weinan Wang and Ben Markusoff.

 

These developments may be difficult to navigate.  If you need guidance from an experienced employment lawyer, call Hum Law today at (416)214-2329 or email info@thehumlawfirm.ca.

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The challenges related to the Covid-19 pandemic and economic challenges have prompted the Ontario government to once again extend protection to prevent temporary layoffs from automatically becoming permanent job losses until January 2, 2021.

Previously, the Ontario government had suspended the effect of temporary layoff provisions until September 4, 2020, deeming all non-unionized employees laid off from work to be on emergency leave.

Until January 2, 2021  employers benefit from extended maximum temporary layoff periods without fear of having to pay out significant termination and severance pay, giving some businesses the chance to regroup and be financially viable.  Employees will also benefit from continued job protected leave until at least January 2, 2021, and not be deemed terminated.

This announcement also included an extension of job protected Infectious Disease Emergency Leave for parents who believe it is still unsafe to send their children to school.

With the frequent changes related to COVID-19, both employers and employees need to understand their rights. If you are unsure how Ontario’s Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 affects you, contact Hum Law Today.

Editors Note: On September 3rd the Ontario government issued a press release changing the date and extending the suspension until January 2021. 

Ontario’s Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 (the “Act”) came into effect on July 24, 2020 and the Declared Emergency ended on the same day.

The new regulation under the Employment Standards Act, 2000 (ESA) deemed an employee to be on a job-protected Infectious Disease Emergency Leave when the employer has temporarily reduced or eliminated their hours of work because of COVID-19.  The regulation affects how the termination, severance and constructive dismissal rules under the ESA apply during the COVID-19 period.  These temporary rules will expire six weeks after the Declared Emergency ended, i.e. on September 4, 2020.  They do not apply to employees represented by a trade union.”

This has set off a chain reaction for most employers and could very well trigger costly severance and termination obligations. Employers are strongly encouraged to review all  employee contracts with an experienced employment lawyer to protect the interests of all involved, there are a number of major changes employers should be aware of including the recent  Waksdale decision from  the Ontario Court of Appeal.

Although many emergency orders remain in effect, Section 17 of the Act defines a new stage in the pandemic trajectory by terminating the COVID-19 Declared Emergency in Ontario. The termination of the Declared Emergency has a direct impact on both the Declared Emergency Leave (the “DEL”) and the Infectious Disease Emergency Leave (the “IDEL”). With everything that employers need to consider for reopening regarding health and safety measures, it can be easy to ignore employment law issues until there is a problem. However, in doing so, employers leave themselves open to costly lawsuits and reputational issues.

Understanding the DEL and the IDEL

Declared Emergency Leave (the “DEL”)

The DEL entitles employees to “an unpaid, job-protected leave of absence” for various reasons during a declared emergency. Once a Declared Emergency has been terminated, employees are no longer entitled to the leave after the date that the emergency is terminated. The only exception is when an order made under s. 7.0.2 of the Emergency Management and Civil Protection Act (“EMCPA”) that applies to the employee is extended beyond the duration of the declared emergency.

When an employee can no longer rely on the DEL, the employee may still be entitled to another similar situational leave such as sick leave, family responsibility leave, family caregiver leave, family medical leave, critical illness leave, bereavement leave, or infectious disease emergency leave.

When a leave is not available to an employee to deal with a situation caused by COVID-19, employers still have a duty to accommodate. For example, an employee may have difficulties putting their kids into day-care due to their limited capacity. Employers may need to accommodate the employee’s need to take care of their children by offering alternative options.

Infectious Disease Emergency Leave (the “IDEL”)

Under this temporary rule, “a non-unionized employee whose employer has temporarily reduced or eliminated their hours of work because of COVID-19 is deemed to be on a job-protected IDEL.” The IDEL expires six weeks after the Declared Emergency ends. In this case, the six-week period will end on September 4, 2020. After the six-week period, the employee will no longer be deemed on leave. In this situation, you have three ultimate options as an employer – to call back the employee, to terminate the employee and end your relationship, or you can lay off your employee, which leaves the door open for a return to work.  Effective September 4, 2020, the temporary layoff rules start again.

As of September 4, 2020, the employer must call the employee back to work, or the employee could claim constructive dismissal unless there is a written contract or internal policies allowing temporary layoffs.

Unlike the DEL, the IDEL remains effective until September 4, 2020, six weeks after the termination of the Declared Emergency in Ontario

What this means for employers

Most businesses are entering into uncharted territory as the economy reopens. Employers are responsible for keeping up to date with legislative changes and the legal ramifications if those changes are not adhered to. Regarding employment contracts, the COVID-19-related changes, in addition to the recent game-changing Waksdale decision invalidating many termination clauses, has made well-drafted contracts a necessity. Relying on outdated, vague, and template contracts will leave many employers in a difficult situation resulting in costly termination payouts. All employers must consult an experienced employment lawyer and be prepared make immediate changes to contracts.

With the frequent changes related to COVID-19, both employers and employees need to understand their rights. If you are unsure how Ontario’s Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 affects you, contact Hum Law Today.