In Ristanovic v Corma ( 2021 ONSC 3351) Justice Dunphy had a situation where two long service employees were given temporary lay off notices, one on January 31, 2020 and the other on February 18, 2020. The reasons given for the layoff notices did not reference COVID and they were promised to be recalled within 35 weeks . In fact they were not recalled within that period. Neither plaintiffs were ever subject to temporary layoffs before .
The Defendant advanced a defence that there is an implied term of employment that where an unprecedented event such as a global pandemic occurs, then the employer would be allowed to temporarily lay employees off without constituting it a dismissal.
The Judge said “NO’ to this theory for two reasons:
1) The layoff letters occurred “significantly before the facts that evolved to the point of a global pandemic impacting our entire Province or country.” Here is the extract :
 The defendant took no serious issue with the foregoing summary of the law. Instead, the defendant urged me to find that there is an implied term in the contract of employment of both plaintiffs authorizing the employer to lay off an employee as was done here when faced with the extraordinary circumstance of a global pandemic. I was urged to give consider the admonition of the Court of Appeal in Mifsud v. MacMillan Bathurst Inc., 1989 CanLII 260 (ON CA) concerning implied terms in a contract of employment. In Mifsud, McKinlay J.A. said that when “there is no written contract it is necessary first to determine what terms are implied in the specific contract involved, and those terms are not those which the court considers reasonable, but rather what the parties would have agreed to when forming the contract, had they turned their minds to the type of situation which later transpired” (at para. 18). Mr. Prentice forcefully urged me to find that the pandemic is a once in a lifetime occurrence. Had the parties turned their mind to it when the contract was first entered into, they would reasonably have agreed to permit a temporary lay-off to safeguard the ability of the employer to re-hire them when the situation improved.
 It might be noted that only a few lines below the foregoing passage from Mifsud that I was urged to consider, McKinlay J.A. also cautioned that the exercise of implying terms into an unwritten employment agreement should not be undertaken to impose upon the parties the Court’s view of a “reasonable and just” contract. The exercise is one of determining the objective terms of the contract the parties entered actually entered into.
 In effect, the defendant is asking me to imply into a contract of employment a form of force majeure clause. I am mindful of the need to decide only those matters that require a decision in this or any other case. On the facts of this case, I don’t think that the question of an implied “global pandemic” exception to the well-settled law prohibiting non-consensual lay-offs properly arises. I reach this conclusion for two reasons.
 First, the lay-offs in this case arose significantly before the facts had evolved to the point of a global pandemic impacting our entire Province or country. The lay-off letters sent did not, in fact, purport to justify the lay-offs of either plaintiff on the basis of an emergency that was global in scope impacting all sectors of the economy. The defendant itself told the plaintiffs in writing that they were being laid off because of “political instability” and a fall-off in orders. These circumstances were only beginning to produce impacts in Canada even if they were nevertheless having an out-sized impact on the defendant’s business. Over the coming weeks and months, the situation in China that side-swiped the defendant’s business in late 2019 and early 2020 morphed into a global phenomenon affecting businesses and employment the world over. There were no lock-down orders in effect in Ontario at the time the plaintiffs were laid off. The plaintiff was not prohibited from operating and the plaintiffs were not forbidden from coming to work.
 Without employing hindsight, there is little to distinguish the situation as regards Corma in late January/early February 2020 from any other adverse situation that might commonly affect a business, even to the extent of causing 40% of its revenues to dry up. A retailer may find business impacted by a big-box store opening a block away; a manufacturer may find the market flooded with imports as a result of a change in tariffs or a free-trade agreement. Insolvency, recessions or the evolution of the competitive marketplace have never justified unilateral lay-offs under our law.
 Whether it may be reasonable to imply some kind of a force majeure clause in the case of a business prohibited from operating or placed under severe and unforeseen operational limitations by government action is something that I do not need to determine here on these facts. The circumstances existing when these plaintiffs were laid off do not reasonably lead to the conclusion that the parties would have mutually agreed to allow an indefinite lay-off with minimal compensation to be imposed upon employees had they but turned their mind to the prospect of their employer suffering headwinds – even material headwinds – in the operation of their business due to events abroad over which the employees have no control nor ability to provide for.
2) Even if there was such an implied term, as the layoff extended beyond 35 weeks, the ESA deemed it to be a retroactive dismissal and thus this implied term would be in violation of the ESA.
This case is very fact specific.
At the time of both layoffs there was no Infectious Disease Emergency Leave in the ESA. However we now know that in light of the recent case of Coutinho v. Ocular Health Centre Ltd., 2021 ONSC 3076 that the existence of that legislation does not prevent the plaintiff from claiming constructive dismissal
This case starts to deal with the more interesting and troubling question of frustration of contract. If when the employer is shut down by governmental mandate and therefore is prohibited from using the services of the employee does the the employment contract become frustrated? This issue remains to be determined in future cases.
ALERT: Winning plaintiff counsel was Jordan Reiner of Lecker and Associates in which my brilliant son, Matthew Fisher, is a partner.
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