Canadian Workplace Issues in times of Covid-19

Unjust Dismissal – A Powerful Remedy for Dismissed Employees in the Federal Sector
May 16, 2019

Canadian Workplace Issues in times of Covid-19

Canadian Workplace Issues in times of Covid-19

As we face increasingly restrictive measures across Canada, employers and employees have many questions about rights and obligations in the workplace in times of a pandemic. I thought it would be helpful to discuss a few of these issues.

Safe Workplace

Employers always have an obligation to provide a safe workplace. But these days, many employees find themselves in workplaces with a high level of exposure to the public. That is becoming more and more dangerous. Given the spread of Covid-19, employers must be prepared to take all appropriate precautions immediately. Employees may need to wear masks, gloves and maintain an appropriate distance from customers and other employees. Is this enough? In some workplaces, it seems doubtful. The virus is spreading at an alarming rate. Many employees may conclude that the workplace is unsafe and may exercise their rights under the Occupational Health and Safety Act to refuse work and stay at home. Employers may not be obligated to continue salary during this period, but employees may be eligible for EI benefits. If employees are fired or disciplined for refusing to work, they may have rights under the OHSA to reinstatement and damages. Normally, there are several hurdles for employees to meet to be able to prove that the workplace is unsafe. However, these days, it is likely that it will be much easier for employees these days to demonstrate an undue level of risk if any of these cases are litigated.


Some employees may be quarantined. This could be because of recent international travel, exposure to someone who had the virus or their own illness. Employees should inform their employers immediately and should not try to come for work and endanger others. This may involve an unpaid leave but, again, quarantined employees may be entitled to EI benefits without the normal waiting period. Some employers may decide to implement a paid leave policy for some or all of the quarantine period. This may also depend on the employer’s general sick leave policy but will not be mandatory for many employers. Some insurance policies may cover quarantine periods. Employers are entitled and maybe even required, to ask employees questions about exposure levels, where they have travelled and whether they have any symptoms.

Temporary Layoffs

Employment standards legislation across Canada allows employers to put employees on an immediate temporary lay-off without pay for a limited time period – and provided the employer continues providing benefits during a lay-off period. However, Canadian common law has traditionally viewed most lay offs as a “constrictive dismissal.” Since it is a term of employment that an employee will work and expect to be paid, when an employee’s work stops, that has been viewed as a breach of the contract and therefore a dismissal. Historically, there have been a few exceptions to the common law. If the employee has an employment agreement that allows for a temporary lay-off, works in a seasonal business or other type of business where layoffs are expected or if the employer has traditional put employees on layoffs, a lay-off is permissible. If the situation does not fit one of these exceptions, employees have been able to assert claims of “constructive dismissal” and demand full severance.

Some employment lawyers have suggested that employees who face a temporary lay-off can claim constructive dismissal and sue their employers for full severance. I think this is risky business. For employers who are facing a massive reduction in business, it would make no sense to force those employers to continue to pay their employees where there is no work. I would think that Ontario courts would recognize that all employers are facing a similar situation and that this type of rare and exceptional situation falls into one of the categories of traditional exceptions to the common law rule.

Employers may need to disclose their confidential information including sales and other data as part of providing their case. This is not to say that employers should use the current coronavirus crisis to “lay-off” workers without compensation where they cannot justify it economically. For example, if only one or two employees are put on layoff, that might be a fairly transparent case of constructive dismissal. Courts are entitled to review these situations on a case by case business. But if government-imposed restrictions have led to a massive decline (or shutdown) of the business, it seems to me that common sense will prevail here. Bringing a constructive dismissal claim in these circumstances may only benefit the employment lawyer who suggested it.

Creative Solutions

Some workplaces may suggest work from home arrangements, reduced hours, reduced pay or other changes to the terms of employment. Normally these types of changes would also lead to constructive dismissal claims. For example, an employer cannot normally insist that an employee accept a significant pay cut. Imposing one is a constructive dismissal and allows an employee to sue for full severance.

But in crazy and challenging times, employees will need to show some flexibility to try and retain employment and help their employers get through this crisis. Obviously, employees will have to make their own assessment of what is actually taking place. For example, if employees of a supermarket chain or a drug store are asked to take a pay cut while the company is enjoying some of its highest sales ever, that would make no sense. On the other hand, employees of a business that is obviously facing drastically reduced sales may be willing to discuss temporary changes to their terms of employment.

If an employer is suggesting these changes, employees should try to negotiate and insist on certain protections. Get the employer to put everything into writing and confirm that the changes are temporary. Ask for information that will help demonstrate the need for the changes. Insist that the measures are being imposed fairly and that all levels of management are also making sacrifices. Depending on the size of the company, employees may need to act collectively here, and this may be trickier than it sounds. But the point here is that both employees and employers may take a different approach to this unanticipated situation.


Ultimately, in this crisis, many employees will be facing an extremely tenuous situation with little or no income coming in. This is especially problematic for people who are already having a tough time getting by. The Federal government has started to address this by rolling out a plan for emergency EI benefits. But these benefits will not provide nearly enough income for most people who find themselves out of work. Some employees in these situations will benefit from wrongful dismissal lawsuits and will be able to get reasonable compensation from their employers.

But some employers are also facing enormous challenges and may wind up requiring creditor protection or may simply go out of business. In these circumstances, wrongful dismissal litigation may not get employees anywhere since there may be no money to pay, even if the employees win a judgment.

Hopefully, we will find a medical solution to the Coronavirus problem sooner than anticipated so that many of these issues will be moot. But in the meantime, employees and employers should get proper legal advice in these situations before making any rash decisions, which might have significant financial consequences.

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