Court Finds that IDEL Temporary Layoff is a Constructive Dismissal under Common Law:

In Coutinho v Ocular Health Centre ( 2021 ONSC 3076) Justice Broad was faced with an issue that has become of vital importance in Ontario, namely whether a temporary layoff under the ESA ( now called Infectious Disease Emergency Leave ) constituted a constructive dismissal under the common law.

In holding that such a layoff was a a constructive dismissal, the Court made the following points:

1) Citing section 8(1) of the ESA which says that no civil remedy is affected by the ESA, the Judge determined that since all the jurisdiction to enact a Regulation flows from the enabling statute, a regulation cannot override a statutory provision. This is what the judge said :

[41] Ms. Allen for Ocular argues that, given the unprecedented emergency brought on by the global COVID-19 pandemic and the severity of its impact on employers and employees in Ontario, section 7 of the IDEL Regulation, which deems a temporary layoff by an employer for reasons related to COVID-19 not to constitute a constructive dismissal, ought to be interpreted to apply to not only constructive dismissals for the purposes of the ESA, but also at common law. 

[42] In the case of Bristol-Myers Squibb v. Canada (Attorney-General, 2005 SCC 26 (S.C.C.) Binnie, J., writing for the majority, citing Dreidger, Construction of Statutes (2nd ed. 1983) observed at para. 38 that 

…in the case of regulations, attention must be paid to the terms of the enabling statute: 

It is not enough to ascertain the meaning of a regulation when read in light of its own object and the facts surrounding its making; it is also necessary to read the 10 words conferring the power in the whole context of the authorizing statute. The intent of the statute transcends and governs the intent of the regulation. (Elmer A. Dreidger, Construction of Statutes (2nd ed.1983), at p. 247) 

This point is significant. The scope of the regulation is constrained by its enabling legislation. Thus, one cannot simply interpret a regulation the same way one would a statutory provision. 

[43] In my view, the scope of s. 7 deeming a temporary lay-off for reasons related to COVID-19 to not constitute a constructive dismissal is constrained by s. 8(1) of the ESA. It is not possible to reconcile the interpretation of the IDEL Regulation urged by Ocular with the section of the statute which unequivocally provides that an employee’s civil remedy against her/his employee ( my note, this should be employer) shall not be affected by any provision of the Act”

2) The Judge also relied on a recent Ministry of Labour publication in which it stated ” These rules affect only what constitutes a constructive dismissal under the ESA. These rules do not address what constitutes a constructive dismissal at common law.’ This is what the Court said on this point:

[44] The fact that s. 7 of the IDEL Regulation may not be interpreted so as to take away an employee’s right of action at common law against her/his employer for constructive dismissal is reinforced by the online publication of the Ontario Ministry of Labour, Training and Skills Development (the “Ministry”), cited by Ocular in its Factum, entitled “Your Guide to the Employment Standards Act: temporary changes to ESA rules” (the “Ministry Guide”). 

[45] In the section entitled “Overview” at page 1 the Ministry Guide states that on May 29, 2020 the government made a regulation under the ESA in response to COVID-19. During the COVID-19 period, a non-unionized employee is “deemed” on a job-protected infectious disease emergency leave if their employer has temporarily reduced or eliminated their hours of work because of COVID-19. 

[46] Under the heading “Constructive dismissal” on page 4 the Ministry Guide stated as follows: 

O. Reg. 228/20 establishes that there is no constructive dismissal under the ESA where a non-unionized employee’s wages or hours of work are temporarily reduced or temporarily eliminated by their employer for reasons related to COVID-19 from March 1, 2020 to July 3, 2021. This rule does not apply where the termination or severance resulted from a constructive dismissal that occurred before May 29, 2020. For a termination or severance resulting from a constructive dismissal to occur before May 29, 2020, it means the employee must have been constructively dismissed and quit their employment within a reasonable timeframe, all prior to May 29, 2020. 

For a discussion of each of the conditions that must be met in order for this rule to apply, please see Conditions for O. Reg. 228/20 temporary layoff and constructive dismissal rules to apply. 

These rules affect only what constitutes a constructive dismissal under the ESA. These rules do not address what constitutes a constructive dismissal at common law. 

[47] In my view, in reviewing the purpose of the IDEL Regulation the court can consider not only the wording of the regulation itself but also extrinsic evidence such as the Ministry Guide. 

[48] The entitlement of the court to consider such extrinsic evidence in interpreting subordinate legislation was made clear by the decision of the Alberta Court of Appeal in Heppner v. Alberta (Ministry of Environment) [1977] A.J. No. 523 (Alta C.A.). Lieberman, J.A., writing for the panel stated as follows at para. 34: 

One further aspect involved in reviewing the purpose of subordinate legislation must be examined and that is what evidence a court can consider in coming to its decision. Is a court restricted to the order in council itself, or can “extrinsic” evidence be examined? This question was considered by the Ontario Court of Appeal in LaRush v. Metropolitan Toronto & Region Conservation Authority, [1968] 1 O.R. 300, 66 D.L.R. (2d) 310. In that case the court was examining the purpose which caused the Authority to expropriate a certain parcel of land, and it was argued by counsel for the Authority that certain documents and the testimony of officers of the Authority could not be considered in 12 determining the purpose behind the expropriation. Aylesworth J.A., in delivering the unanimous judgment of the court, said at pp. 316-17: 

Appellant, as I understand it, contends that none of these documents with the single exception of the appellant’s resolution to submit the scheme to the Minister may be looked at and that the evidence of Mr. Higgs called as a witness at the trial by appellant cannot be looked at to ascertain the purpose of the acquisition of respondent’s lands. The learned trial Judge thought he could consider these matters and I emphatically agree. The documents themselves are the appellant’s own records of appellant’s proceedings and of the action taken by it. The contents of these documents and anything which necessarily follows from a consideration of their contents bears in the most direct way upon the question of appellant’s real purpose. Again that real purpose properly may be tested in the light of the evidence of Mr. Higgs as to the need or the lack of it to acquire respondent’s lands for any purpose of conservation of natural resources; Mr. Higgs was well qualified to speak on matters of conservation and more particularly on such matters as affecting respondent’s lands and the surrounding area; he was appellant’s own witness. The admissibility of the documents and of the evidence of Mr. Higgs seems so clear as not to require authority. 

The learned justice of appeal then goes on to cite numerous cases as authority for the proposition he has stated. 

[49] Although it is not binding on the court, the Ministry Guide is of assistance by offering insight into the Ministry’s intention in promulgating the provisions of the IDEL Regulation respecting constructive dismissal, including the stipulation that they do not affect an employee’s common law right to advance a civil claim of constructive dismissal, a position which is consistent with s. 8(1) of the ESA. 

I cannot express how important this case is as it is the very first case to deal with this issue. In my mediation practice, this issue has already come up many times and there are numerous cases already being litigated on this issue . More importantly , if this ruling stands , there will undoubtably be a virtual tsunami of cases coming forth now that this issue has been addressed by the Courts.

If you wish a copy of this case email me at