IDEL May Preclude Claims for Constructive Dismissal at Common Law: Was Coutinho v. Ocular Health Wrongly Decided?

We recently reported on the Ontario Superior Court’s decision in Coutinho v. Ocular Health, which held that an employee who was “placed on temporary layoff” due to the COVID-19 pandemic, and deemed to be on infectious disease emergency leave, had been constructively dismissed at common law. See our May 14, 2021 Update, IDEL May Not Preclude Employees from Claiming Constructive Dismissal.

Three weeks later, the Court in Taylor v. Hanley Hospitality ruled that Coutinho was wrongly decided and should not be followed.

In Taylor, the Court determined that the government-enacted Ontario Regulation 228/20: Infectious Disease Emergency Leave (IDEL) operates to displace the common law. Thus, where an employee is temporarily laid off pursuant to IDEL, this temporary layoff does not constitute dismissal under the Employment Standards Act (ESA) nor does it constitute constructive dismissal at common law. The Court reasoned that, to apply the interpretation put forward in Coutinho would render IDEL meaningless, which “offends the rules of statutory interpretation”.

As we previously reported, under IDEL an employee is deemed to be on “infectious disease emergency leave” where:

  1. the employee is not represented by a trade union;
  2. the employer temporarily reduces or eliminates the employee’s hours of work and/or wages for reasons related to COVID-19; and
  3. the temporary reduction or elimination occurs during the “COVID-19 period” as defined in IDEL.

IDEL specifically states that a reduction or elimination in a non-unionized employee’s hours and wages for reasons related to COVID-19 (1) does not constitute a layoff within the meaning of the ESA, and (2) does not constitute constructive dismissal.

It remains to be seen how the two cases will be reconciled, and whether one or both of these decisions will be reviewed by the Ontario Court of Appeal.

For information on this case law development, please contact any member of our Employment, Pensions and Executive Compensation Group.