You can’t always get what you want – Mick Jagger/Keith Richards.

We may be ‘done’ with COVID-19, but COVID-19 is not done with us. The sixth (!) wave of the pandemic continues to infect and hospitalize. In addition, the long-term ramifications of the 2020 shutdown on the economy continue to manifest themselves as the related matters work their way through the courts. And we will have to continue to wait for a clear answer to a critical question: was putting someone on Infectious Disease Emergency Leave (“IDEL”) a form of constructive dismissal, exposing countless employers to liability, or was it permissible due to the legislation that introduced it?  

One of the most discussed and debated questions was whether the Ontario government’s creation of IDEL allowed employers to unilaterally put an employee on leave without triggering a constructive dismissal. So far, the courts have been split on this issue, with some finding the legislation did not change the common law and that putting someone on a leave or layoff is a constructive dismissal, and at least one notable decision taking the opposite approach.

As we have written about previously, in April 2021 the Ontario Superior Court of Justice released its decision in Taylor v Hanley Hospitality Inc. In that case, the court sided with the employer and held that being placed on IDEL was not constructive dismissal. The employee appealed this decision. The Court of Appeal for Ontario heard submissions on the case and the overriding legal issue on April 1, 2022. Yesterday, the Court of Appeal for Ontario released its decision. Instead of providing the expected and much-needed clarity on the interaction between IDEL and the common law, it granted the appeal on procedural grounds and remitted the substantive decision back to the Superior Court of Justice.

The bottom line: According to the Court of Appeal for Ontario, a Rule 21 motion under the Rules of Civil Procedure was the incorrect means to bring this matter before the court. More importantly, we still do not have guidance on the impact of IDEL on the common law.

The Story of Taylor

The plaintiff in Taylor was laid off in March of 2020. She was recalled to work in September, and, at the time the motion was heard, was still working for the employer. She brought a claim against her employer alleging that this layoff was a constructive dismissal. The employer argued that it had been required by the Ontario government to close all its storefronts, and one store entirely, and that it was left with no choice but to lay off over 50 employees, including the plaintiff.

The employer brought a Rule 21 motion, requesting determination of an issue before trial namely, whether the plaintiff’s action was precluded by virtue of the provisions of s. 50.01

of the Employment Standards Act, 2000 (the “Act”) and of O. Reg. 228/20 passed under the Act. The employer sought dismissal of the action. 

The Superior Court of Justice Decision

Justice Ferguson found that when the Ontario government amended the Act to state that all layoffs related to COVID-19 were deemed to be IDELs retroactive to March 1, 2020, this resulted in a change both to the Act and to the common law. In other words, the plaintiff had not been laid off in March 2020 ; she had simply been placed on a leave of absence due to COVID-19. As the Act provides that an employer may direct an employee to go on IDEL, as the employer did in this case, there was no basis for the plaintiff to argue that she had been constructively dismissed.

The Court found that the plaintiff was not constructively dismissed but had been lawfully placed on IDEL by her employer.

The Impact of Taylor

Taylor was in direct contrast with other decisions of the Court to that point which had found placing an employee on IDEL did constitute a constructive dismissal at common law. Due to the conflicting decisions, employers and employees alike were left without a clear understanding of how to address and resolve the torrent of wrongful dismissal claims relating to having been placed on IDEL. Without an appellate decision these were impossible to resolve.

The Court of Appeal Decision

The Court of Appeal reviewed the trial decision and found that the trial judge had made “several errors of law” when addressing the motion and improperly treated the Rule 21.01(1)(a) motion “as if it were a motion for summary judgment.”

The Court of Appeal noted that the trial judge had taken judicial notice of several facts in the matter and that these had coloured the decision. Under Rule 21.01, the only facts which a judge could treat as true were those set out in the statement of claim. As a result, the Court found that it was not plain and obvious that the plaintiff’s action could not succeed.

Significantly, the Court of Appeal explicitly refused to rule on whether an employee being put on IDEL was a constructive dismissal at common law. The Court noted that the parties had requested it provide a determination in this regard but still refused to do so. In support of its refusal, the Court noted that the materials had not requested this remedy and neither the record nor the submissions before it permitted it to carry out a proper analysis. The Court also noted that the matter could benefit from submissions from the Ministry of the Attorney General for Ontario on the legislative intent of the provisions of the Act and regulations. 

The Court remitted the matter back to the Superior Court of Justice for determination by another justice.

Takeaways

Many, if not most, of the Ontario employment bar were eagerly anticipating something definitive about the interaction between IDEL and the common law. Instead, the Court of Appeal provided a procedural assessment of the applicability of a motion under Rule 21 and several reasons why it would be inappropriate to rule on the substantive aspects of the matter. As such, nothing definitive can be gleaned from yesterday’s decision.

The two earlier decisions (Coutinho v. Ocular Health Centre Ltd. and Fogelman v. IFG) in which the Court found that being put on IDEL was a constructive dismissal for purposes of the common law continue to be good law. Further, given that Taylor was overturned, albeit on technical grounds, there are now no decisions which state that being placed on IDEL was not constructive dismissal for purposes of the common law. 

Despite this, we continue to lack any appellate guidance on the matter. Further, given the speed at which the court system functions, any such guidance may be many years out, at which point it will likely be a purely academic matter without any material impact.

The Rolling Stones had it right – indeed, you cannot always get what you want.  

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