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New Court Decision on Infectious Disease Emergency Leave

COVID-19 | Employment Standards

Many employees were left in a state of limbo during the pandemic. Some of this uncertainty was due to the Infectious Disease Emergency Leave (“IDEL”), a regulation under the Employment Standards Act, 2000 (“ESA”), enacted by the Ontario government in the early days of the pandemic. Although most of the provisions of IDEL ended on July 30, 2022, there is still uncertainty about how leaves under IDEL will be treated by the Courts.

IDEL provided, among other things, that a temporary reduction or elimination of an employee’s wages or hours of work by the employer, for reasons related to the pandemic, does not constitute a layoff or constructive dismissal, as long as it occurs during the “COVID-19 period” – i.e. March 1, 2020 to July 30, 2022. As a result, many layoffs were retroactively converted into leaves under IDEL.

As we have written about previously, there are conflicting Court decisions about the legal effect of leaves under IDEL. In two separate Court decisions, the Court found that although such leaves are permitted under the ESA, they will constitute constructive dismissal under common law if such layoffs are not permitted by the employment contract or agreed to by the employee.  There was one “employer-friendly” decision on this issue, which found that such leaves do not constitute constructive dismissal under common law. However, that decision was subsequently overturned by the Court of Appeal on procedural grounds. The Court of Appeal declined to rule on the critical issue of whether or not leave under IDEL constitutes constructive dismissal under common law.

New Court Decision in Small Claims Court: Wilkinson v. Pharma

As it stands, there is no definitive Court decision on how leaves under IDEL will be treated by the Courts. However, the recent case of Wilkinson v. Pharma provided another basis in which the Courts can find that an employee was constructively dismissed by being placed on leave under IDEL.

In that case, the employee was told on May 14, 2020 that in four days, as a result of the pandemic, her income would be reduced to nothing. On June 26, 2020, she resigned from her employment and accepted a new position elsewhere. About one month later, she sued her former employer in the Small Claims Court, alleging constructive dismissal.

The Court declined to rule on the issue of whether or not leave under IDEL constitutes constructive dismissal under common law. However, the Court applied an exception to IDEL in order to find that IDEL did not apply to her situation.

The basis of this exception was section 7(2) of IDEL, which states that the provisions of IDEL do not apply “to an employee whose employment was terminated under clause 56(1)(b) of [the ESA] … before May 29, 2020.” Section 56(1)(b) of the ESA states that an employee’s employment is terminated if “the employer constructively dismisses the employee and the employee resigns from his or her employment in response to that within a reasonable period”.

In Wilkinson, the Court found that by resigning her employment within six weeks of receiving notice that her income would be reduced to nothing, she had effectively resigned from her employment within a reasonable period in response to a constructive dismissal. Therefore, pursuant to section 7(2) of IDEL and section 56(1)(b) of the ESA, IDEL had no application to her circumstances. As a result, the Court found that the employee was constructively dismissed, and granted Judgment in her favour.

It is important to note that the Wilkinson case was a decision of the Small Claims Court, so it is unclear whether this will be accepted as a precedent or persuasive authority in other Court decisions. However, the Wilkinson case is another example of the Courts ruling in favour of employees in this complex legal issue.

Conclusion

Despite most of IDEL’s provisions expiring on July 30, 2022, there are still many employees and employers that still find themselves grappling with the legal issues caused by IDEL. If you are an employee that was laid off during the pandemic, we can help you decide if it is worth pursuing a case against your employer.

If you are an employer that had to lay off employees during the pandemic, we can help you defend against any litigation that is brought against you as a result. If you have any questions about your situation or if you would like to get legal advice, please feel free to contact us.

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