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COVID–19: Employment Law Considerations

By March 15, 2020September 10th, 2021DMC News & Events, Employment Law

DMC is aware of the March 15th announcement from the Royal College of Dental Surgeons of Ontario(“RCDSO“) in response to the COVID–19 pandemic. The RCDSO “strongly recommends that all non-essential and elective dental services should be suspended immediately. Emergency treatment should continue” and that “The College will revisit this recommendation in the first week of April.”

As a result of the RCDSO’s statement, we have been asked by a great number of dentists where they legally stand with respect to closing their office, temporarily laying off their team members, and health and safety issues if they don’t have enough personal protective equipment.

We are always happy to assist our dentist clients with their concerns; however, anything we comment on today could be out of date tomorrow. Further, employment law decisions made today in the face of COVID-19 may not be answered until the first few litigation cases dealing with COVID-19 employment law matters make their way through the court system in a few years’ time. So, the information contained in this post is provided for general information purposes ONLY and does not constitute legal or other professional advice, nor does using or relying on this information create a lawyer-client relationship. Please be sure to read the full disclaimer at the bottom of this post.

The current situation with COVID-19 and how governments and regulatory bodies are reacting and making orders/declarations is unprecedented in modern times, fast-moving and fluid. It is also filled with increasing uncertainty with each passing day. This uncertainty is impacting every one of us (DMC included), especially given the government’s advice on social distancing and other steps to minimize the spread of COVID-19.

With that said, when it comes to temporarily laying-off team members, what we can share is where the law stood up until today and some thoughts on where it might end up (purely hypothetical). We wish we had some very simple rules, but unfortunately, there are lots of legal traps to be aware of (and to tread carefully with) because there are essentially 4 areas of law at play which don’t always work well together to provide a clear answer:

  1. Contract Law, which is private law, based on what your written employment agreement says if you have one.
  2. Common Law, which is judge-made law that comes from historical court cases; this helps govern your obligation where you don’t have any written employment agreement in place and, in the event of a dispute, the employee has chosen to take you to court instead of going to the Labour Relations Board to enforce their rights under the Employment Standards Act, 2000.
  3. Employment Standards Act, 2000, which is minimum standards legislation that generally applies to almost all dental practices. An employee can elect to go to the Labour Relations Board for relief under this Act (it’s free for them) instead of going to court to have a judge decide (common law), which typically involves them hiring a lawyer.
  4. Occupational Health and Safety Act, which applies to all dental practices and imposes obligations on the Employer to ensure a safe working environment for team members.

Let’s discuss each in turn.

Contract Law:

Contracts entered into freely between private persons will generally govern their relationship. Here, we’re talking about employment agreements. Courts will NOT have to intervene and use Common Law (judge-made law that comes from historical court cases) if there is a contract in place that was entered into properly and is clear/complete enough to be enforced.

So do you have a written employment agreement with your team member(s)?
If you DO NOT –  skip to the part about the Common Law below.

If you DO –  does that agreement allow you to temporarily adjust hours or layoff the team member?

This may say something like the Employer gets to reduce the Employee’s hours based on patient scheduling, volume or work, etc. or it may say something like a temporary-layoff under the Employment Standards Act does not constitute a termination …

If your contract DOES NOT talk about these things, then skip to the Common Law section below.

If IT DOES, and assuming the contract was entered into properly and the terms are clear enough to be interpreted/enforced, then an employer could argue that they’re able to rely upon it to temporarily layoff a team member by giving them notice. No advance notice (like a few weeks, etc.) should be required for temporary layoffs. Bear in mind that any temporary layoff should be in accordance with the Employment Standards Act, 2000 because those are minimum legislative standards that employees are entitled to (discussed in greater detail below).

Contract law disputes are typically resolved through the court system and judges look at the contract itself to determinate if it was entered into properly (no duress or undue influence, consideration was given if a contract is given after the employee has commenced working) and if it is clear and complete enough to be enforceable.

If there is no contract or the contract is not enforceable (e.g. wasn’t entered into properly or wasn’t drafted clearly enough), then an employee can go to court to ask for relief based on the Common Law (discussed next).

Common Law:

The Common Law is a judge-made law based on historical court cases.

Employees may not be happy about their temporary layoff and claim that their employer WAS NOT entitled to do so. So they’ll take their case to court and claim that they were wrongfully terminated, also called “constructive dismissal“, because the employer unilaterally changes an essential element of the employment relationship without giving the employee proper advance notice or payment in lieu of notice.

This type of dispute typically involves going to court and hiring lawyers to convince a judge who’s right.

Courts and judges tend to be more generous to employees when making damages awards because it’s based on historical court cases. A previous court case involving similar facts may have resulted in a specific award, and future courts may consider themselves bound to follow that judge-made law as it was applied in that previous case. This differs from the Labour Relations Board, which is free for employees to use but which can only give employees what they are entitled to under the Employment Standards Act, 2000 (discussed below).

Typically, if a court finds that an employee was wrongfully terminated, they will award an employee with up to 1 month of notice or pay in lieu of notice for every year they’ve been with an employer for up to approximately 24 months (depends on a multitude of factors). This is compared to the Employment Standards Act, 2000, where an employee is entitled to just one week of notice (or pay in lieu of notice) for every year they’ve been with the employer up to a maximum award of just eight weeks.

Mind you, courts have also said that employees have a duty to mitigate their own damages by finding alternative work or accepting coming back to work for the same pay/similar position if it becomes available so long as the environment isn’t, for example, hostile, embarrassing or humiliating.

Employment Standards Act, 2000:

The Employment Standards Act, 2000 (“ESA“) is minimum standards legislation that overrides Contract Law and Common Law to protect employees by forcing employers, for example, to provide minimum notice or pay in lieu of notice in the event of a termination of their employment. Employment agreements cannot circumvent the ESA or provide employees with less than what it provides.

With respect to temporary layoffs, under the ESA, an employer is deemed to NOT have terminated an employee if they’ve temporarily laid them off for up to 13 weeks in any period of 20 consecutive weeks. This is found in Section 56(1)(c) and 56(2) of the Act, as well as Section 2(1)2 of the Regulations made under that Act. This means that employees are NOT entitled to notice or pay in lieu of notice under the Act because they have NOT been terminated, they’ve just been temporarily laid off.

Again, a temporary layoff under the ESA is NOT a termination (so no notice or pay in lieu of notice is required to be given) even if the employer DOES NOT specify a recall date. This assumes that the period of the layoff DOES NOT exceed the 13 weeks in any period of 20 consecutive weeks.

So while this may sound good on paper to an employer (“Hey, I get to temporarily layoff a team member and I don’t owe them notice or pay in lieu of notice so long as it’s less than 13 weeks!”), the reality is that this would just be in the context of a complaint by an employee under the ESA. An employee could STILL go to court and claim they were wrongfully terminated and ask for damages under the Common Law. Whether they will be successful or not will depend on the specific facts of the case.

For more information on temporary layoffs from the ESA perspective, please see the Ontario Ministry of Labour’s website, including their information on temporary layoffs.

Occupational Health and Safety Act:

The Occupational Health and Safety Act, R.S.O. 1990, C. 0.1 (the “OHSA“) is legislation that deals with health and safety in the workplace. It places a great amount of responsibility for workers’ health and safety on the workers themselves but it puts the onus of enabling the workers to take on that responsibility squarely on the employer. Among other things, an employer must take all necessary/reasonable precautions to protect workers from workplace hazards. Employers must also instruct, inform and supervise workers to protect their health and safety. Given the fluidity of the COVID-19 pandemic, it may become extremely difficult for employers to be able to satisfy their obligations under OHSA. For example,

  • will they pre-screen patients on the phone and in-person when they arrive?
  • are the persons doing the screening properly qualified and asking the right questions?
  • will they record all the information properly?
  • will they provide their team members with the proper personal protective equipment, train them on how to use it, and supervise them to make it’s all being worn properly?
  • have team members or patients recently travelled to a place – like China, Italy, South Korea or Iran – that are suffering from outbreaks?
  • will the employer pre-screen employees to see if they have COVID-19 or are symptomatic?
    • The latest case definition shared by the Ministry of Health is HERE, and an initial COVID-19 Self Assessment Tool has been posted to the Ontario Government website. Individuals who suspect they have COVID-19 can consult this tool to determine whether and how to seek further care.

Given the fast-paced work environment of a dental office, it may be very difficult for an employer to do all the things that’s expected of them to keep team members safe. And when the dentist’s regulatory body is suggesting that they shut their office down for the next few weeks (only doing emergency treatments), it makes sense to follow that advice. This is where an employer’s obligation to abide by their Health and Safety obligations may end up trumping Contract Law and the Common Law.

Let’s Talk About Public Policy

There’s a certain priority of laws at play here. First, there is government legislation that includes the minimum standards employers owe employees under the ESA, as well as employer’s obligations to protect employees and keep them safe under OHSA. These laws are passed by our legislative bodies and meant to protect vulnerable employees, so individuals cannot rely on Contract Law or Common Law to get around these paramount laws.

Next, you move onto Contract Law, which often trumps Common Law (judge-made law). Why? Because instead of requiring a judge to interpret a situation and make a decision based on historical cases, you have an enforceable employment agreement that should govern the situation.

But behind all of these different types of laws is Public Policy. Laws reflect our communal values and they have been created for the greater good. And right now, it’s in the best interests of the greater good to FLATTEN THE CURVE of COVID-19 related infections/deaths. We need to slow it down because it’s putting a strain on our health system and taking a toll on the economy. It’s a national emergency and has been declared a pandemic. And that’s when existing laws – some of which are old and archaic and not equipped to deal with things like the spread of COVID-19 – need to be flexible.

That’s why the RCDSO’s guidelines are so important here. We need to pay attention to them, as well as what the other levels of government are saying – federal, provincial, and municipal. These government bodies are acting quickly and implementing measures to try to slow down/stop the spread of COVID-19. And Canadians’ health and well-being is paramount.

So, irrespective of what Contract Law or Common Law might say, advancing Public Policy may end up getting raised as a defence by employers who DO NOT have contracts but who do follow the ESA in temporarily laying-off team members. Taking it one step further, the Ontario and Federal governments may declare (and establish legislation to this effect) a province-wide shut down of businesses, travel and social gatherings, so this all may be a moot point.

For example, after the SARS epidemic in 2003, the Ontario Government passed legislation (called the SARS Assistance and Recovery Strategy Act, 2003, S.O. 2003, c. 1) that gave employees additional unpaid leaves of absences if (among other things) they couldn’t work because:

  • they had SARS;
  • they were in quarantine or isolation;
  • they subject to a control measure issued to the public by the government;
  • they were acting in accordance with a SARS related order under the Health Protection and Promotion Act;
  • they received a direction from their employer in response to the employer’s response that the employee may expose other individuals in the workplace to SARS.

Terminating an Employment Agreement Because of “Frustration”

Now, just so you know, there’s also the argument that an employment agreement between an employer and employee can become FRUSTRATED (i.e. terminated) because, due to COVID-19 and through no fault of the employer (it’s beyond their or the employee’s control), the Employer or employee cannot abide by their obligations under the employment agreement to maintain a safe working environment. An employment contract is deemed frustrated and thereby terminated, for example, when there is no reasonable likelihood of the employee being able to return to work within a reasonable time. Since we’re just at the onset of this COVID-19 pandemic, it may be too early for an employer to argue that an employment agreement has been “frustrated” (in that they cannot comply with their obligations due to a significant change that is outside their control) and is therefore terminated – particularly since temporary layoffs could suffice.

Following Contract Law + Employment Standards Act, 2000

If you have good contracts in place that were entered into properly and that contemplate temporary layoffs (e.g. a reduction in working hours due to patient scheduling or work volume, etc.), then you could take the position that you’re within your contractual rights to temporarily layoff your employee and that Common Law (judge-made law based on historical court cases) does NOT apply. This is your Contract Law position that we discussed above. You just need to be aware of your obligations under the ESA at the same time so that you don’t run afoul there and set yourself up for your employee to make a free claim to the Labour Relations Board later on that you didn’t follow the temporary layoff provisions in the ESA.

Common Law + Occupational Health and Safety Act

If you don’t have contracts in place or they are deficient (not entered into properly or aren’t complete/clear enough), you can always argue that, as an Employer, you cannot abide by your obligations to maintain a safe working environment AND that you needed to layoff team members for public policy reasons (i.e. help stop the spread of COVID-19). There’s also the argument that an employer could raise later on that the employment agreement became frustrated (i.e. terminated) because there was no reasonable likelihood of the employee being able to return to work within a reasonable time and it was due to something outside the employer’s control.

Final Thoughts

With COVID-19, we’re entering uncharted territory. New announcements from the government and regulatory bodies (like the RCDSO) are happening almost daily. Prior to this pandemic, the law concerning temporary layoffs was governed by Contract Law, the Common Law, and the ESA. Now, because of the COVID-19 pandemic, the Employer’s obligation to maintain a safe working environment based on their Common Law and Occupational Health and Safety Act obligations for team members MAY NOW be paramount to what employment agreements and the Common Law would have otherwise said. Plus, Public Policy and the doctrine of Frustration may trump the Common Law when it comes to defending against a claim of wrongful dismissal. We don’t know how this will play out… We’re just putting it all out there so you can see for yourselves how grey the law is.

In Light of the Above:

  • Review your existing employment agreements if you have them to see if they allow you to unilaterally and temporarily layoff team members/reduce their hours due to reduced patient flow and workload;
  • Put everything in writing if you make an employment-related decision (e.g. you place an employee on a temporary layoff) and try, if possible, to get your employee to acknowledge the decision you’ve made and accept same (e.g. initial a copy of a letter you give them);
  • In the event of a temporary layoff, let the employee know that their job is waiting for them (and don’t create an acrimonious, humiliating, or embarrassing work environment as part of the process) and explain that you’ll be paying them up to the date of their temporary layoff plus continue provide benefits/entitlements throughout the layoff period if your office provides benefits. You do not need to continue paying them during the layoff period, but you should continue to provide them with all their regular entitlements/benefits during that time;
  • Don’t use language like “terminated”, “fired”, “let go”, etc. and instead just say “temporary layoff”;
  • You can direct team members to the federal government’s website so that they can look into getting EI during their temporary layoff;
  • Explain that you are assessing this situation on an ongoing basis;
  • Explain that you are concerned that you or they could hypothetically expose other team members or patients or other people who interact with the dental practice to COVID-19; and
  • Explain that this is impacting everyone, your regulatory body (the “RCDSO”) and the Ontario Dental Association has recommended emergency-only treatments for the next 2 weeks, and that the health and financial risks are real for everyone (yourself included) and you have obligations to them to make sure the work environment is safe and they’re safe and protected.

Lastly, we have received a lot of questions about Employment Insurance entitlements for employees as employers are rightly concerned about their team. As there have been almost daily comments from the Federal government about possible changes to Employment Insurance to help employees, the best thing to do is review the Government of Canada’s website – and the COVID-19 statement on the Benefits page.

These are difficult times for the whole world, and we should remember to follow the directives from our various levels of government as they are announced … and that without our health we have nothing.

This post is current as of 11:00 pm on March 15, 2020 and applies only to the Province of Ontario. Information in this post may become outdated as laws or policies change.