Many have been anxiously awaiting the publication of Taylor v Hanley Hospitality Inc., 2022 ONCA 376 (Taylor), and the Ontario Court of Appeal’s (ONCA) ruling on whether Ontario Regulation 228/20: Infectious Disease Emergency Leave (IDEL) shields employers from common law constructive dismissal claims. However, the ONCA recently declined to comment on this very issue, instead finding that the motions judge erred in her approach to the respondent’s Rule 21 motion. Given this, the ONCA found that it was “inappropriate to rule on the issue of whether the amendments to the ESA and associated regulation affect common law rights.”
The circumstances of this case arose from the appellant employee’s placement on a temporary layoff on March 27, 2020, following the outbreak of the COVID-19 pandemic. The respondent employer continued to run its storefront with a reduced staff, who were not placed on layoff. As a result, the employee argued at trial that they were constructively dismissed, their layoff was unrelated to COVID-19, and it was instead “a business decision made by the [employer] in response to unfavourable economic conditions.” The employer argued that the appellant was on an infectious disease emergency leave from March 27, 2020 until September 3, 2020 when they were recalled back to work and that they were never constructively dismissed. The employee did not deliver a reply.
The respondent employer brought a Rule 21.01(1)(a) motion, under the Ontario Rules of Civil Procedure, 1990, for a determination of the issue before trial. The judge ruled that the matter was appropriate for a Rule 21 motion because it “involve[d] statutory interpretation and not matters of credibility.” The judge ultimately ruled in favour of the employer, finding that the legislative context and intent behind section 50.1 of the Employment Standards Act, 2000 and Regulation 228/20 was to limit employers’ exposure to claims of common law constructive dismissal.
However, on appeal, the ONCA found that the motions judge made several errors of law, and remitted the matter back to the Superior Court of Justice for determination. Among other things, the ONCA’s reasoning was as follows:
- The motions judge failed to assume that the allegations in the statement of claim were true (which is required when determining a Rule 21 motion);
- The matter involved the interpretation of both fact and law, making a Rule 21 motion inappropriate for determination of the matter;
- The motions judge inappropriately took judicial notice of both the impact of the COVID-19 pandemic on the respondent’s business and the intention behind the Ontario government’s emergency measures; and
- The motions judge did not properly apply the principles of statutory interpretation to her analysis of the Employment Standards Act, 2000 and Regulation 228/20.
Employers must unfortunately await a new decision from the Ontario Superior Court of Justice if this matter is, in fact, even dealt with by the Court in the future. As the COVID-19 pandemic moves into a third year, it is more than possible that Taylor may never make its way back before the Court. It should also be noted that this case has been sharply contrasted with Coutinho v. Ocular Health Centre Ltd., 2021 ONSC 3076, where the Ontario Superior Court found that employees placed on IDEL may claim constructive dismissal pursuant to the common law, and IDEL only precludes claims of constructive dismissal under the ESA. Leave to appeal in this case was not granted, meaning that the only law currently standing in relation to this issue is in favour of allowing common law constructive dismissal claims when an employee is placed on IDEL. That may remain the case unless and until Taylor is heard for a second time and a contrary decision is reached.
If you have any questions about this insight, please reach out to Catherine Coulter or Emily Kroboth.