CASE ALERT: Layoff Relief Update 

A recent decision from the Ontario Superior Court of Justice has provided much needed clarification on the interaction between temporary layoff relief regulations and constructive dismissal law in Ontario.  This case has significant implications for employers who have had to temporarily layoff non-union employees due to the pandemic.


In late May, 2020, the government introduced regulations converting temporary layoffs of non-union employees into unpaid infectious disease leaves under the Employment Standards Act(ESA).    The duration of this relief has been repeatedly extended.  Most recently, on June 3, the Province announced that it would extend the application of this relief all the way to September 25, 2021.

This regulatory relief is particularly important for employers who normally cannot impose a temporary layoff on an employee without the risk of an employee claiming constructive dismissal and entitlements to statutory and common law termination entitlements. 

There has been much debate about whether the regulation restricts employees from claiming constructive dismissal at common law or if the relief is limited to preventing claims to statutory termination entitlements.   A few months ago, PooranLaw highlighted a case that found that the ESA layoff relief did not apply to limit an employee’s right to claim common law constructive dismissal.  This is consistent with the Ministry of Labour’s interpretation. However, a recent case has come to the exact opposite conclusion, refusing to follow the earlier case.

The Facts

In Taylor v. Hanley Hospitality, released on June 7th, the Superior Court refused to follow the earlier Countinho decision that had held that the ESA layoff relief did not apply to prevent common law constructive dismissal claims. The court in Taylor pointed out that it would render the ESA’s relief measures for constructive dismissal meaningless if it did not have this result.  


This update is welcome news for employers, but it doesn’t end the issue – there now exists two contradictory decisions from the lower court, meaning that this issue is very likely going to the Ontario Court of Appeal to determine which decision is upheld as good law. Until then we’ll have to wait and see with some uncertainty.    This case also demonstrates that the courts and arbitrators are not bound to follow Ministry of Labour policy and interpretation.  This in turn casts some doubt as to whether a court or arbitrator would follow the Ministry of Labour’s interpretation on other pressing issues for employers, such as the interpretation of the eligibility rules for Paid IDEL (a matter that remains in flux as discussed in our blog here).

PooranLaw will continue to monitor legal developments related to Layoff Relief in the future. In the meantime, if you require legal assistance in determining how these new rules apply to you or your organization, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team. 

Note: This article provides general information only and does not constitute, and should not be relied upon as, legal advice or opinion. PooranLaw Professional Corporation holds the copyright to this article and the article and its contents may not be copied or reproduced in any form, in whole or in part, without the express permission of PooranLaw Professional Corporation.