Things continue to heat up in the employment law field. After over one year of the pandemic, we are also now seeing some COVID-19 employment cases coming through the courts. One such case is Coutinho v. Ocular Health Centre Ltd. [2021] O.J. No. 2237, where the Ontario Superior Court of Justice held that employees temporarily laid off because of the COVID-19 pandemic are entitled to bring a claim for constructive dismissal.
Justice Broad held that Ontario’s Infectious Disease Emergency Leave Regulation (IDEL) enacted under the Employment Standards Act, 2000 allowing employers to temporarily lay off their employees due to the pandemic does not take away a laid-off employee’s common law right to sue for constructive dismissal. The plaintiff, Coutinho, had been advised by her employer and believed that the layoff was legal in accordance with Ontario’s new regulations enacted during the COVID-19 pandemic. The employer’s lawyers argued that Coutinho was deemed to be on an emergency leave and her layoff did not amount to constructive dismissal. Justice Broad disagreed, finding that the IDEL regulation does not affect Coutinho’s right to pursue a claim for constructive dismissal. At paragraph 50:
It is well-established that “at common law, an employer has no right to lay off an employee and that absent an agreement to the contrary, a unilateral layoff by an employer is a substantial change in the employee’s employment, and would be a constructive dismissal” as stated in Elsegood v. Cambridge Spring Service 2002 Ltd., 2011 ONCA O.J. No. 6095 (C.A.) at para. 14.
At its core, constructive dismissal is a termination of employment by conduct rather than by words. The employer’s conduct demonstrates to the employee that the employment has been terminated (i.e. a significant lay off, a reduction in salary or benefits, etc.) the employer does not expressly state that the employee has been terminated, but its actions amount to a rejection of the existing terms of the employment contract. Therefore, leaving the employee without the rights and benefits it had exercised in its employment with the employer.
In these circumstances, a constructively dismissed employee is entitled to claim monetary damages — including a payment for notice, severance and possibly aggravated or punitive damages arising from the manner of dismissal.
As stated in Potter v. New Brunswick Legal Aid Services Commission 2015 SCC 10. This change may be brought about by (1) a single, unilateral act of the employer that breaches the contract in a manner substantially altering the essential terms of the contract; or (2) ongoing conduct which demonstrates an intention to no longer be bound by the employment contract, from the perspective of a reasonable person.
The key is to obtain legal advice from an employment lawyer if your find yourself in a layoff, your employment terms are revised or you have been terminated from your employment. Chapman Law welcomes your call to discuss these issues and assist you with your employment law needs.