Covid-19 has sent human resources departments, senior leaders, and employees down an increasingly cluttered rabbit hole of legal information as they try to figure out how best to manage their workplaces (and their own employment) in the face of a crisis which is destined to have severe economic effects. The situation is evolving rapidly and the law changes daily. Even employment law experts are scrambling to keep up. The employment bar is also working to get as much information out to their clients (and potential clients) as possible and that is perfectly fine. What I have observed occurring arising out of this are a couple of very risky misconceptions which are being repeated so frequently in the media and elsewhere they start to sound like answers to key questions which are clear unassailable gospel when in fact some of these sound bites are wrong, lack nuance, or fail to account for changing law, lack of clarity, and significant risk. Left uncorrected the only thing that will do is create harm and problems which ultimately result in employment law litigation (which might be ok for employment lawyers, but is not great for most and isn’t where most people are aiming to head right now).
So, here are two sound-bite answers I have seen being circulated and repeated and which I see as having the potential to be incredibly misleading and cause people serious harm if not clarified:
Misleading answer #1: If your employer lays you off, it is unlawful and you will get full common law damages arising out of your constructive dismissal.
What’s wrong with this? This sounds great for employees and may encourage employees to take aggressive positions with employers believing that it is crystal clear they will be paid their total compensation for many months (up to two years!). I like aggressive employee-side positions as much as the next employment litigator, but what I do not like are aggressive positions taken blind to the risk and that is what I observe evolving here. First, it is 100% true that the current common law says clearly that for non-union employees absent a contractual agreement which permits temporary lay offs, such lay offs constitute a constructive dismissal at law. It is also true that if you are constructively dismissed and your contract does not govern what you are entitled to on termination, your entitlement is governed by common law. So, what’s missing?
- Common law is judge made law. It changes when new cases arise and judges make new law. It is not outside the realm of possibility that in the face of an unprecedented situation a judge would determine that a temporary lay off right now is not in fact a constructive dismissal.
- Common law can be changed legislatively. New laws are being passed to deal with this situation constantly. We cannot ignore the risk the government renders temporary lay offs lawful by passing legislation which says so.
- Even if on the facts of a particular case a constructive dismissal is found to have occurred, if an employer invites employees back to work after a few weeks, their “full” common law damages may be limited to what they lost over those few weeks only. Absent something more than the lay off itself (such as bad faith, a toxic environment), in many cases an employee in this situation would not be able to refuse to return to work without risking that a court would see them as having failed to mitigate their losses.
What’s the harm? People are making critical decisions about their employment based on partial information and absent a full understanding of risk and potential reward. So, if you read in the paper or hear from a neighbour that if you are laid off you are clearly entitled to 24 months pay and you refuse the lay off and the return to work in reliance upon that, you may get some very bad news when you show up to a lawyer’s office with your claim: namely you may have torpedoed a long career and relationship with your employer and are entitled only to a few weeks pay.
Misleading answer #2: Covid-19 related leaves are “job-protected”. (Implication: if employees take such a leave they cannot be fired during or after the leave.)
What’s wrong with this? It simply is not true. Like other job-protected leaves (think parental leave), an employee cannot be terminated BECAUSE of the leave (even a little bit – the leave cannot be a factor in the decision), but that does not mean that they cannot be terminated while on or after taking a leave as long as the termination is for entirely other reasons. So if an employer closes up an area of their business and terminates all employees as a result of that closure, the fact one employee is on unpaid leave when that happens will not mean that person cannot also be lawfully terminated.
What’s the harm? Employees have a false sense of security and believe accessing an unpaid leave affords them job security and employers believe they will be unable to terminate employees on leave and may act more hastily than necessary to terminate or lay off swaths of their workforce. None of this is true.