Claim Constructive Dismissal for a COVID-19 Layoff

Can an Employee Claim Constructive Dismissal for a COVID-19 Layoff?

Under the Infectious Disease Emergency Leave regulations of the Employment Standards Act, an employee placed on layoff or reduced hours as a result of the COVID-19 pandemic is not to be considered constructively dismissed as per the Employment Standards Act; and thus, cannot claim constructive dismissal for a COVID-19 layoff. What this means is that an employee cannot, as a result, choose to quit and seek compensation for severance entitlements outlined in the legislation. This does not disqualify employees, however, from seeking a severance under common law.

In a recent judgment, the Ontario Superior Court of Justice ruled that the regulation under the Employment Standards Act does not prevent an employee from pursuing a remedy through the courts. This means that employees that have had their hours reduced or have been laid off may choose to leave their job permanently and claim damages for severance pay at common law (i.e. in court). The exception is that if temporary layoffs or reduced hours are agreed upon, for instance, as part of the initial employment agreement. Such exceptions are rare and usually limited by specific sectors and/or industries that are seasonal. Employees are advised not to agree to a reduction of hours or a temporary layoff without seeking consultation with an employment lawyer.

In short, if you are an employee that has been laid off or had a reduction of hours, you may not claim constructive dismissal for a COVID-19 layoff, but pursue a claim for a fair severance. Be sure to consult with an employment law lawyer if this is a scenario applicable to you. Employers may attempt to justify a layoff or reduction of hours and claim it is permissible under the Employment Standards Act. Employees must be aware that common law damages, as of now, still apply.

[The recent ruling mentioned above is cited as Coutinho v. Ocular Health Centre Ltd., 2021 ONSC 3076.]

To better understand your workplace rights during these unprecedented times, we encourage employees and employers to seek legal advice. We at Whitten & Lublin are happy to provide insight and advice into your specific circumstances. If you are looking for employment lawyers and would like more information about what Whitten & Lublin can do for you, please contact us online or by phone at (416) 640-2667 today.