174 Davenport Road, Toronto, Ontario, M5R 1J2

Latest developments in wrongful dismissal litigation

Updated: May 21, 2024

Ontario has been through different levels of lockdowns and restrictions since March of 2020 as a result of the global Coronavirus (COVID-19) pandemic. These have had a significant economic impact on both employers and employees alike.

One area of law that will have to adapt to the rapidly changing workplace environment is wrongful dismissal litigation. The Employment Standards Act, 2000, S.O. 2000, c. 41 governs the minimum standards and rights of employers and employees. It is also important to remember that employers and employees may have additional rights under other legislation and the common law.

The latest developments on jobs and employment from the Ontario government during the pandemic are found here.

One recent development is that the COVID-19 period as it relates to temporary layoff has been extended from March 1, 2020 to July 1, 2021, specifically:

“In response to the COVID-19 pandemic, the Ontario government made a regulation that changed certain Employment Standards Act (ESA) rules during the “COVID-19 period”. This regulation has been amended, extending the COVID-19 period to July 3, 2021.

During the COVID-19 period (March 1, 2020 to July 3, 2021) a non-unionized employee whose employer has temporarily reduced or eliminated their hours of work for reasons related to COVID-19 is deemed to be on a job-protected Infectious Disease Emergency Leave.

Under the ESA, where an employee is laid off for a period longer than a temporary layoff, the employee is considered terminated by their employer and would generally be entitled to termination pay (and in certain cases severance pay). However, under this regulation, a non-unionized employee is not considered laid off if their employer temporarily reduces or eliminates their hours of work for reasons related to COVID-19. This means the layoff clock stops ticking towards a termination of employment.

Beginning on July 4, 2021 employees will no longer be deemed to be on infectious disease emergency leave and the ESA’s regular rules around temporary layoff resume. For practical purposes, an employee’s temporary layoff clock re-sets on July 4, 2021.”

More information on the Infectious Disease Emergency Leave is found here.

Many businesses have had to reduce their employees’ hours, to lay-off certain employees on a temporary basis or to transition their workforce to work from home.

Under normal circumstances, if an employee is laid off, he or she may eventually be entitled to treat the layoff as a constructive or wrongful dismissal. The employee may then start a wrongful dismissal lawsuit for additional remedies under the Employment Standards Act or the common law. While the latest rules have changed how layoffs are presently treated under the Employment Standards Act, it is important to note that the common law still applies.

The rules around temporary layoffs are set to resume on July 4, 2021, although this may change as the pandemic progresses.

When this happens, some employers may be able to bring back the laid off employees while others may not. If an employee is not reinstated, he or she may be able start a lawsuit alleging constructive dismissal as a result of being laid off during the pandemic. The law on whether a being laid off as a result of the pandemic can be treated as a constructive dismissal is unclear. The Courts will not be able to ignore the pandemic in deciding whether an employer acted in good faith in laying off employees.

It is also possible that some employers may have abused the layoff rules during the pandemic to reorganize and restructure their workforce. If an employer is found to have acted in bad faith in laying off an employee, the employee will likely be found to have been constructively dismissed thereby entitling him or her to both statutory and common law remedies.

It is important to keep up to date on the latest rulings from the Courts as the above issues still need to be addressed.

How have employers and employees been impacted?

Many employees have had to work from home and reorganize their lives and daily routines. Some people have developed mental health issues and have suffered the consequents of being isolated. It has also become difficult to maintain productivity as employees and employers have both had to make significant adjustments.

New safety measures have had to be implemented in workplaces and these have created an additional burden on employees and also significantly increased the operating costs and overhead of many employers. Social distancing and sanitizing protocols have also been put in place by most employers.

During the less-stringent restrictions over the summer of 2020, most essential and non-essential employers needed to have COVID-19 screening forms and questionnaires asking their employees if they have experienced various symptoms or if they have been exposed to infection. These had to be filled out on a regular basis by each employee entering the workplace.

If employers fail to comply with safety requirements, they may be ticketed or face serious fines. If an employee fails to follow the employer’s safety measures he or she may not be allowed in the workplace and may possibly face further discipline. The law in this area is changing and the Courts must keep up with the latest developments. It is not clear if non-compliance with COVID-19 safety measures in the workplace can be treated as just cause to dismiss an employee.

Are vaccines against COVID-19 mandatory?

Canada does not have mandatory vaccination for its citizens. Although some kinds of vaccines in Ontario are critical (for example school-aged children must be vaccinated against certain diseases like polio), a person is not legally bound to take a vaccine.

This can create challenges and legal questions for employers and employees as vaccines against COVID-19 become available. An employer cannot force an employee to take a vaccine. Nonetheless, certain workplaces may gradually implement different requirements with respect to COVID-19 vaccination. If employers have bona fide reasons such as many people working in close proximity, the employers may eventually be able to implement a rule requiring their employees to be vaccinated.

The Courts have not ruled on this issue which is certain to become more relevant as time progresses and vaccines against COVID-19 become more readily accessible.

The latest COVID-19 Orders & Bylaws for the City of Toronto are found here.

The information on this website is for informative purposes only. It is not legal advice. Furthermore, you can only retain a lawyer after a consultation. If you need a wrongful dismissal lawyer or have other employment law issues, call me at: 416 323 3614