Canadian HR Reporter

Priya Sarin and Matthew Badrov are lawyers at Sherrard Kuzz LLP, one of Canada's leading employment and l a b o u r l a w f i r m s , r e p r e s e n t i n g employers. Priya and Matt can be reached at (416) 603-0700 (main), (416) 420-0738 (24-hour) or by visiting www.sherrardkuzz.com. RELATED CASES fundamental breach of the employment contract (whether or not the contract is in writing). In that case, the employee is deemed to have been constructively dismissed and entitled to common law reasonable notice of termination (or pay in lieu of notice). Common law reasonable notice requirements are generally considerably higher than requirements under employment standards legislation. That's the bad news. The good news is that a constructive dismissal arises only if there has been a unilateral change by the employer to the terms and conditions of employment. If an employee agrees to the change in the terms of employment (the temporary layoff ), no constructive dismissal arises. Similarly, if the change is not imposed by the employer but is the result of a government directive (shutting down operations), an employee may not be able to successfully assert the layoff constitutes a constructive dismissal. Even if the layoff might be a constructive dismissal, the employee has an obligation to mitigate their potential losses. For example, if a laid- off employee is recalled to work and declines (and the employer-employee relationship is not so damaged that it would be reasonable for the employee to return), a court may find the employee failed to mitigate their losses (in whole or in part) by failing to return to work. This will reduce the value of the claim against the employer. P r a c t i c a l c o n s i d e r a t i o n s : Employers are in an unenviable position. While this pandemic rages among us, business decisions must be made in real time, with imperfect information and under enormous stress. However, those same decisions will later be scrutinized by adjudicators with the benefit of time, clarity and context. To minimize the risk that a decision made today to lay off an employee will result in a claim for constructive dismissal, consider the following best practices: • If possible, before laying off an employee, obtain the employee's consent to do so. This is not always straightforward, so it's advisable to consult with experienced employment counsel on how best to proceed. • Maintain contact with laid-off employees, and provide them with updates, including when the business may resume operations. Even if you do not know when operations might resume, contact with laid-off employees will mean that they are less likely to listen to rumours and speculation and more likely to feel connected to the workplace and be ready to return. • If possible, consider whether the business can recall employees earlier than anticipated by taking advantage of various government initiatives such as the Canada Emergency Wage Subsidy. The federal government has indicated that the subsidy is available to any business, regardless of size, including a non-profit or charitable institution, but will not apply to a public body and is intended to encourage an employer to maintain employees on payroll even if there is a reduction in work. Frustration of contract: Even if an employer takes all appropriate steps, it may still be faced with a constructive or wrongful dismissal claim from a laid- off employee. If the layoff resulted from COVID-19-related reasons, including a government-mandated closure, an employer may be able to defend itself by relying on the doctrine of frustration of contract. Frustration of contract arises when an unforeseen event, outside of the control of either party, renders the contract impossible to perform. In that case, the employee is not entitled to any damages under common law or employment standards legislation. BEVILACQUA V. GRACIOUS LIVING CORP., 2016 ONSC 4127 (ONT. S.C.J.). ESA layoff provisions and no intention to repudiate contract were irrelevant to constructive dismissal issue, but worker not accepting reinstatement was failure to mitigate. CANADIAN GENERAL-TOWER LTD. V. U.S.W., LOCAL 862, 2008 ONCA 404 (ONT. C.A.). Employer planned permanent layoffs, but it recalled workers after 49 weeks. Layoff became temporary and workers were entitled to temporary layoff benefits. BRISEBOIS, RE, 2016 CARSWELLBC 3295 (B.C. EMP. STDS. TRIB.) Doctor's note said worker was unfit to work for four weeks. Employer said worker didn't meet minimum standards of job, but no frustration because no evidence condition was permanent. 24 HOUR 416.420.0738 We never call it a day. sherrardkuzz.com | 416.603.0700 | 24 Hour 416.420.0738 | 250 Yonge St #3300, Toronto, ON M5B 2L7 | @sherrardkuzz Workplace issues never sleep. That's why our 24 hour line is answered by a Sherrard Kuzz lawyer every hour of every day, even on holidays. Whatever the issue. Whatever the time. Our 24 hour line means our clients sleep well at night even if we sometimes don't. If you're an employer, we're the only call you need to make. Bottom line These are unprecedented times and the ground seems to shift with every passing day. For these reasons, it is important to stay abreast of the issues, plan deliberately and proceed with caution. If your organization must report a confirmed case of COVID-19 in the workplace, understand what you are reporting and what you are not reporting. And if you have to lay off employees, or have already done so, keep in touch with those employees, and leverage the experience of a skilled employment lawyer to help minimize risk. CHRR

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