COVID-19 LAY OFFS

Were you laid off due to the pandemic and not called back to work? Then you may be entitled to termination pay.

Ristanovic v. Corma, 2021 ONSC 3351

In Ristanovic v. Corma, 2021 ONSC 3351, the employer suffered a disruption in work due to the pandemic. The employer laid off 17 percent of its employees. Among them, were Mr. Ristanovic who was 67 years old and Mr. Asafov who was 62 years old. Mr. Ristanovic and Mr. Asafov were to be called back to work no longer than 35 weeks later, but the employer failed to do so. They had been working for the employer for roughly 30 years. They had never been laid off before, until the pandemic. The pair immediately retained counsel and the matter went to court.

The employer argued that there was “an implied term in the [employment] contract”…that allowed the employer to lay off Mr. Ristanovic and Mr. Asafov due to the pandemic. The counsel for Mr. Ristanovic and Mr. Asafov argued that the employer unilaterally laid off the pair which formed a material change in the terms of the employment contract.

Justice Dunphy noted:

“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;”

accepting the…employer’s argument would, in effect, imply into an employment contract a form of force majeure clause; and

the events of 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 [Mr. Ristanovic or Mr. Asafov] on the basis of an emergency that was global in scope impacting all sectors of the economy.”

Justice Dunphy found that the pair were dismissed from their employment without reasonable notice and granted them 22 months of termination pay.

Coutinho v. Ocular Health Centre Ltd., 2021 ONSC 3076

There are two branches to view a lay-off in this current pandemic. First through the Employment Standards Act and second through the common law.  Under the Employment Standards Act a lay off may be permitted in certain conditions. Under the common law, Coutinho v. Ocular Health Centre Ltd., 2021 ONSC 3076 states that a lay off in this current backdrop may be constructive dismissal. One method of constructive dismissal is when an employer lays off an employee and states it will do its best to call back the employee. This is what happened in Coutinho.

The employee consequently obtained new employment. However, she retained counsel when she was laid off.

Counsel for the employee argued that the employee was constructively dismissed under the common law. The employer’s counsel argued that the employer was permitted to lay off the employee under the Employment Standards Act Infectious Disease Emergency Leave which was set up to help employers during the pandemic. Further, the employer’s counsel argued that the employee mitigated her damages (reduced the amount owed to her by the employer) by obtaining new employment.

Justice Broad determined that the employee was constructively dismissed under the branch of the common law and therefore she was entitled to termination pay. However, Justice Broad also determined the employee mitigated her damages by obtaining new employment so the amount granted to the employee by the Court was reduced.

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