Does Unpaid IDEL Trigger a Constructive Dismissal? Court Declines to Answer

by | May 24, 2022 | For Employers

In a recent case, Taylor v. Hanley Hospitality Inc., 2022 ONCA 376, both lawyers asked a three judge panel of the Ontario Court of Appeal (OCA) to decide whether a law which allows an employer to force an employee to take an unpaid leave under the ESA’s IDEL regulation, which is in effect during the COVID pandemic, is NOT a constructive dismissal under the ESA, nevertheless is still a constructive dismissal at common law. The court refused to decide the issue. 

If the employer interpretation is correct, then an employer could unilaterally place an employee on an unpaid IDEL leave from March 1, 2020, to July 30, 2022, and then extend the leave/ layoff for up to another 35 weeks before the employer is required to pay the employee any termination pay. In this scenario, almost all employees find another job during this extended unemployment period and quit and receive no termination pay. 

If the employee interpretation is correct however, then placing an employee on an unpaid IDEL triggers a constructive dismissal and the requirement to pay the employee up to 24 months termination pay at common law. 

The stakes couldn’t be higher. 

The OCA refused to make a decision because, among other things, the motions judge had not made findings of fact and the Attorney General was not notified of the proceedings, therefore did not make submissions on the intent of the IDEL regulation.  In this latter regard, the OCA noted: “…the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.”

Although understandable based on the stated reasons, this ruling does nothing to minimize the uncertainty around this issue. At least one case has stated that the temporary law does not change the common law and at least one case has come to the opposite conclusion. 

Our firm is litigating this issue in a number of cases. I suspect most other employment law firms are also litigating this issue. We were all waiting for the OCA to clarify the law. Now we have to wait until another case gets to the OCA. It is extremely frustrating for everyone involved and I suspect that is why both parties asked the OCA to decide the issue once and for all in this case.

For over 30 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him directly at 416-317-9894 or at [email protected]

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.



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