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.

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.