The last year and a half have brought pain and suffering for many. Whether it was losing your job, falling ill, or just adjusting to the harsh reality that is the new “normal,” we have all struggled.
This is especially true for those people who have been laid off due to the repeated shutdowns, emergency orders, and changing landscape of society. But, unfortunately, some employers used this period of uncertainty and the COVID-19 pandemic as a carte-blanche to engage in some questionably legal practices.
What is Constructive Dismissal?
At a very basic level, constructive dismissal is when an essential term of an employment contract has been repudiated by the employer, and the employee resigns in response. It is the counterpart to a termination of an employee for cause. It comes from the fact that employment contracts are, surprisingly, contracts.
It is easiest to understand using an example. This is a straightforward contract.
Bob will pay Dave $11 to get him a pepperoni pizza.
It has an offer ($11 for a pepperoni pizza), acceptance (Dave gives Bob the pizza), and consideration ($11/a pizza). This contract has both express and implied terms. An express term is that Dave must bring Bob a pepperoni pizza. An implied term could be that Bob must pay Dave in Canadian dollars. Another implied term is that Dave will not steal the pizza. If Bob pays Dave in East Caribbean Dollars, Dave can bring legal action to recover his damages. However, if Dave does not act quickly, he is deemed to have condoned the change and cannot bring legal action.
Employment contracts are much more complicated, and there are various pieces of employment legislation, each having its own subset of regulations. This is why it is highly recommended you seek legal advice immediately if you think you have been constructively dismissed.
The Effect of COVID-19 on Constructive Dismissals
Ontario enacted an Infectious Disease Emergency Leave Regulation under the Employment Standards Act. This regulation allows an employer to lay off an employee for reasons related to COVID-19 temporarily. Such a layoff does not constitute a constructive dismissal.
The decision in Coutinho v Ocular Health Centre Ltd., 2021 ONSC 3076 is just one of the cases that have dealt with how this regulation affects an employee’s right to sue for constructive dismissal.
In the Ocular Health case, the business owners got into a business dispute with some of the doctors employed there. Shortly after this dispute began, Ocular Health accused the doctors of violating COVID-19 rules and used this as justification to shut down the Cambridge clinic where the Plaintiff worked. Due to this, Ocular Health temporarily laid the Plaintiff.
The Plaintiff brought a civil action for constructive dismissal.
Ocular sought to rely on the emergency regulation and wanted this exemption extended to apply to actions for constructive dismissal at common law. The Court, however, rejected this argument. The Court ruled that the emergency regulation did not affect Ms. Coutinho’s right to pursue a civil claim for constructive dismissal against Ocular at common law.
Butkovic v Hudson’s Bay Company, 2021 ONSC 2610 also dealt with the constructive dismissal of an employee. HBC reduced Ms. Butkovic’s salary by 25% due to the pandemic, then informed her she would be terminated in a few weeks. HBC also tried to rely on the same emergency regulations. The Court held that Ms. Butkovic was constructively dismissed.
Have I been Constructively Dismissed?
Unfortunately, the answer is: it depends.
With the increased number of layoffs in the past year, it is becoming increasingly important for employees to ascertain their rights and, if appropriate, to bring these civil actions before the Court to obtain what is rightfully theirs. Unfortunately, many things are out of our control during this unprecedented time. Don’t let this be one of them.
Some employees also confuse a layoff (where you will be called back) with a termination (where you won’t). Employers can use this linguistic confusion to their advantage to confuse employees and prevent them from understanding their rights.
Here at De Bousquet PC, we can answer questions like “have I been constructively dismissed?”, “What am I entitled to?” and “what should I do if I am fired?” If you have these questions or others about your employment rights, please give us a call.