The Ontario Court of Appeal has confirmed the law of constructive dismissal in Ontario.
Employees are constructively dismissed when the employer breaches an essential term of the employment contract OR a course of conduct by the employer establishes that it no longer intends to be bound by the employment contract. It’s this second branch of the test where employers often stumble. Many employers believe that a defence to the first branch of the test is a complete defence. This is wrong. Additionally, the burden of proof rests on the employer when asserting common defences such as condonation.
These considerations are critically important for employers and employees contemplating lay-off during COVID restrictions imposed by government. If the employment relationship is at an end, employers should simply terminate. The notice period owed to the employee may only be extended by the period of lay-off. If the employment relationship is untenable during COVID restrictions then employers should be careful not to trigger liability under the second branch of the test which is law in the Province of Ontario.
How do you do that?