Court and Parties
COURT OF APPEAL FOR ONTARIO DATE: 20220512 DOCKET: C69587
Roberts, Miller and Zarnett JJ.A.
BETWEEN
Candace Taylor Plaintiff (Appellant)
and
Hanley Hospitality Inc. o/a Tim Hortons Defendant (Respondent)
Counsel: Lior Samfiru and Lluc Cerda, for the appellant Ian A. Johncox, for the respondent Tim Gleason and Adrienne Lei, for the intervener Parkdale Community Legal Services
Heard: April 1, 2022
On appeal from the order of Justice Jane E. Ferguson of the Superior Court of Justice dated June 7, 2021, with reasons reported at 2021 ONSC 3135.
L.B. Roberts J.A.:
Overview
[1] This appeal from the dismissal of the appellant’s action for constructive dismissal involves two issues.
[2] The first issue is whether the motion judge erred in her approach to the respondent’s rule 21 motion and in dismissing the action where no evidence was admitted and there were material factual issues to be determined. The appellant submits that the motion judge erred in taking judicial notice of facts not in evidence as well as by misconstruing the pleadings and the pleadings rules.
[3] The second issue concerns the interpretation of one of the many emergency laws and regulations that the Ontario government put into place in response to the global COVID-19 pandemic. The appellant submits that the motion judge erred in concluding that the COVID-19 amendments to s. 50.1 of the Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA”) and the associated O. Reg. 228/20, that establish temporary infectious disease emergency leave, displace the appellant’s common law right of action for constructive dismissal.
[4] The following reasons explain why I am of the view that the motion judge erred in deciding the case under rule 21 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and why I would allow the appeal on that basis. Because of the view I take on that matter, it is inappropriate to rule on the issue of whether the amendments to the ESA and associated regulation affect common law rights.
Background
(i) State of emergency and emergency measures
[5] To properly frame the issues on this appeal and my proposed disposition of them, it is necessary to set out in some detail the statutory provisions that are in question.
[6] On March 17, 2020, pursuant to s. 7.0.1(1) of the Emergency Management and Civil Protection Act, R.S.O. 1990, Ch. E.9 (“EMCPA”), the Ontario government declared a state of emergency in response to the world-wide COVID-19 pandemic. As a result of the declared emergency, under 7.0.2 of the EMCPA, the Lieutenant Governor in Council was broadly empowered to make such emergency orders that were “necessary and essential in the circumstances to prevent, reduce or mitigate serious harm to persons or substantial damage to property”. Numerous emergency measures were enacted and still continue.
[7] In issue in this appeal are the amendments to ss. 50.1 and 141 of the ESA and the provisions of O. Reg 228/20 made under the ESA that create a new category of leave under the ESA: the infectious disease emergency leave (“IDEL”). The Employment Standards Amendment Act (Infectious Disease Emergencies), 2020, S.O. 2020, c. 3 (“ESAA”) contained the amendments and was assented to on March 19, 2020. O. Reg. 228/20 was made under the ESA on May 28, 2020 and filed on May 29, 2020.
[8] Sections 50.1(1.1)(a) and (b) of the ESA prescribe the circumstances when an employee is entitled to an IDEL without pay if the employee will not be performing the duties of his or her position. Section 50.1(1.2) prescribes when an employee is entitled to a paid leave of absence and the employer’s obligations to provide pay if an employee is required to miss work for reasons associated with COVID-19. Section 50.1(1.3) provides that under s. 50.1(1.2), an employee is entitled to a total of three paid days of leave.
[9] Section 50.1(1.1)(a) deals with circumstances that prevent an employee from performing the duties of his or her position because of an emergency declared under section 7.0.1 of the EMCPA, an order made under section 7.0.2 of the EMCPA or the Health Protection and Promotion Act, because he or she is needed to provide care or assistance to a person designated under section 50.1(8), or for other prescribed reasons. Section 50.1(1.1)(b) focuses on reasons preventing an employee from performing the duties of his or her employment that are caused by or related to exposure to a designated infectious disease, such as being under medical investigation or treatment, quarantine, providing support to an affected individual, or travel restrictions. Other reasons include because of an order under section 22 or 35 of the Health Protection and Promotion Act that relates to the designated infectious disease, because of a direction from an employer in response to a concern that the employee may expose other individuals in the workplace to the designated infectious disease, or because of other prescribed reasons.
[10] In addition to the existing regulatory powers for carrying out the purposes of the ESA under section 141(1), the regulatory powers of the Lieutenant Governor in Council were amended and expanded in the ESAA to allow the Lieutenant Governor in Council to make broad transitional regulations, including:
i. Section 141(2.0.3.3) which permits regulations “for any transitional matter that the Lieutenant Governor in Council considers necessary or advisable in connection with the implementation of the amendments made by the Employment Standards Amendment Act (Infectious Disease Emergencies), 2020”. Sections 141(2.0.3) to (2.0.3.5) also refer to a number of acts enacted pre and post pandemic under which the Lieutenant Governor in Council may regulate in connection with the implementation of the amendments of those acts: Fair Workplaces Better Jobs Act, 2017; Making Ontario Open for Business Act, 2018; Restoring Ontario’s Competitiveness Act, 2019; Employment Standards Amendment Act (Infectious Disease Emergencies), 2020; Covid-19 Putting Workers First Act, 2021; Working for Workers Act, 2021;
ii. Section 141(2.0.4) provides that in the event of a conflict between the ESA or its regulations, and a regulation made under sections 141(2.0.3) to (2.0.3.5), the latter, transitional regulations prevail;
iii. Section 141(2.1) that allows for regulations designating an infectious disease for the purpose of section 50.1 and respecting all aspects of the IDEL;
iv. Section 141(2.2) that stipulates that a regulation made under, among other subsections, (2.1), or a regulation prescribing a reason for the purposes of subclause 50.1(1.1)(a)(iv) may, among other things,
(b) provide that an employee who does not perform the duties of his or her position because of the declared emergency and the prescribed reason, or because of the prescribed reason related to a designated infectious disease, as defined in section 50.1, is deemed to have taken leave beginning on the first day the employee does not perform the duties of his or her position on or after the date specified in the regulation.
[11] O. Reg. 228/20, made under the ESA and subtitled, “Infectious Disease Emergency Leave”, for the purposes of s. 50.1 of the ESA designates COVID-19, among others, as an infectious disease. It then sets out the parameters of and entitlements to IDEL. These include when an employee is deemed to be on IDEL (s. 4); when an employee is not deemed to be on IDEL (s. 5); and when an employee, whose hours of work are temporarily reduced or eliminated by the employer, or whose wages are temporarily reduced by the employer, for reasons related to the designated infectious disease during the COVID-19 period, is not considered to be laid off (s. 6) or constructively dismissed (s. 7). Sections 5, 6 and 7 exempt an employee from the application of IDEL whose employment was terminated on or after March 1, 2020, or who was constructively dismissed or laid off for longer than the temporary lay-off period before May 29, 2020. Finally, s. 8 prohibits employees from bringing any complaint during the designated pandemic period.
(ii) The circumstances of the present case
[12] The appellant is employed as an assistant manager of the respondent’s Tim Hortons’ storefront in Whitby, Ontario. According to her statement of claim, on March 27, 2020, the respondent placed the appellant on “a temporary lay-off” without pay. She pleads that following her temporary lay-off, the respondent continued its operations with a reduced staff and that her temporary lay-off was therefore “a business decision made by the [respondent] in response to unfavourable economic conditions” and not related to COVID-19.
[13] Before she was recalled to her employment in September 2020, the appellant commenced an action against the respondent on July 3, 2020, claiming damages for constructive dismissal, bad faith/breach of honest performance, loss of benefits and unpaid vacation pay and vacation pay, plus costs on a substantial indemnity basis and pre- and post-judgment interest.
[14] The respondent defended the action, denying the appellant’s allegations of constructive dismissal and bad faith. In its statement of defence dated September 9, 2020, the respondent pleads that as a result of the Ontario government’s declaration of the state of emergency and subsequently imposed emergency measures due to the pandemic, it was “left with no choice but to temporarily lay off over 50 employees”, including the appellant. The respondent further pleads that the appellant “agreed she would be temporarily laid off from her position”, that the appellant was on infectious disease emergency leave and never terminated from her employment, and that the appellant was recalled to work effective September 3, 2020 and remains in the respondent’s employ.
[15] The appellant did not deliver a reply.
[16] The respondent subsequently brought a motion under rule 21.01(1)(a) of the Rules of Civil Procedure for the determination of an issue before trial, namely, whether the appellant’s action was precluded by virtue of the provisions of s. 50.1 of the ESA and of O. Reg. 228/20 passed under the ESA and asked for the dismissal of the appellant’s action. Neither party filed nor sought to file any evidence on the motion.
(iii) The motion judge’s reasons for dismissal of the appellant’s action
[17] The motion judge found that the respondent’s motion was an appropriate rule 21.01(1) motion “as it involves statutory interpretation (and no matters of credibility)”. She accepted the respondent’s invitation to take judicial notice of a number of facts, including that as a result of the pandemic, the respondent was required by the Ontario government to close all of its storefronts and was limited to take out and delivery; and that emergency measures required some employers, like the respondent, to temporarily close their businesses or cut back their operations, through no choice of their own.
[18] The motion judge accepted as uncontested the respondent’s allegations in its statement of defence because the appellant did not deliver a reply and found that the appellant did not resign and was not constructively dismissed. She concluded that “by virtue of Rule 25 and Ms. Taylor not delivering a reply, Ms. Taylor has acknowledged that she does not intend to prove that the layoff was for reasons other than related to COVID-19”, as pleaded by the respondent.
[19] The motion judge also took as factually true the respondent’s submissions concerning the legislative context and intent behind s. 50.1 of the ESA and O. Reg. 228/20, including that to correct the “problem” that it created when it triggered the state of emergency and required employers to cease or curtail their operations, the legislature amended the ESA and made the O. Reg. 228/20 to create IDEL and reduce employers’ exposure to claims of common law constructive dismissal.
[20] In interpreting s. 50.1 of the ESA and O. Reg. 228/20, the motion judge applied the facts that she accepted as admitted or by way of judicial notice and concluded that these provisions displace the appellant’s common law claim for constructive dismissal and held that the appellant was on IDEL for all purposes; was deemed not to be laid off for all purposes; and was not constructively dismissed for all purposes. She dismissed the appellant’s action.
Analysis
(a) The motion judge erred in dismissing the action under rule 21
[21] The motion judge made several errors of law in her approach to the respondent’s motion and, effectively, treated the respondent’s rule 21.01(1)(a) motion as if it were a motion for summary judgment.
[22] Rule 21.01(1)(a) of the Rules of Civil Procedure provides as follows:
21.01(1) A party may move before a judge,
(a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs.
[23] As stipulated in rule 21.01(2), no evidence is admissible on a motion under (1)(a), except with leave of a judge or on consent of the parties. As already noted, the parties did not consent to admit evidence, nor did they seek leave of the motion judge to do so. Indeed, the appellant took the position that the respondent’s motion was not an appropriate means to resolve the action because of the material issues of fact in dispute.
[24] The well-established approach to be followed on a motion brought under rule 21.01(1)(a) was recently reviewed by this court in Beaudoin Estate v. Campbellford Memorial Hospital, 2021 ONCA 57, at para. 14:
(1) The test is whether the determination of the issue of law is “plain and obvious”;
(2) The facts pleaded in the statement of claim are assumed to be true, unless they are patently ridiculous or manifestly incapable of proof;
(3) The statement of claim should be read as generously as possible to accommodate any drafting inadequacies in the pleading.
[25] The motion judge erred in failing to apply the correct principles on a motion under rule 21.01(1)(a). Importantly, she failed to assume that the allegations in the statement of claim were true. This led her to misapply the provisions of rule 25.08 that stipulate where a reply is necessary and the deemed effect of the absence of a reply.
[26] Among other pleaded facts in the statement of claim, the motion judge was required to assume as true that the respondent had temporarily laid off the appellant because of unfavourable economic reasons and that the respondent had treated her differently than other employees that continued to work at its Tim Hortons’ storefronts. As the appellant had already pleaded in her statement of claim a different version of the facts from that pleaded in the respondent’s statement of defence, which denied the appellant’s allegations, it was not necessary for the appellant to repeat the same allegations in a reply.
[27] Rules 25.08(1) and (2) require a reply only where a party “intends to prove a version of the facts different from that pleaded in the opposite party’s defence” and where a party intends to reply to a matter in the defence “that might, if not specifically pleaded, take the opposite party by surprise or raise an issue that has not been raised by a previous pleading”. As neither of these circumstances applied here because of the allegations already contained in the statement of claim, no reply was required nor even allowed under rule 25.08(3). As a result, in accordance with the provisions of rule 25.08(4), by not delivering a reply, the appellant was “deemed to deny the allegations of fact made in the defence” of the respondent (emphasis added).
[28] The motion judge therefore erred in treating the allegations in the respondent’s statement of defence as admitted facts.
[29] Nor was it open to the motion judge to take judicial notice of the litany of adjudicative facts set out in paragraph 4 of her reasons. These adjudicative facts mirror many of the disputed allegations contained in the respondent’s statement of defence concerning the impact of the COVID-19 pandemic and of the government’s various emergency measures on the respondent’s operations and its business decisions.
[30] The concept of judicial notice allows a court to receive “facts” that are “so notorious or uncontroversial that evidence of their existence is unnecessary”. This does not allow parties “to put before the court controversial evidence to the prejudice of the opposing party without providing a proper opportunity for its truth to be tested”: Public School Boards’ Assn. of Alberta v. Alberta (Attorney General), 2000 SCC 2, [2000] 1 S.C.R. 44, at para. 5. The threshold for judicial notice is strict since the facts are not proved by evidence under oath nor tested by cross-examination: R. v. Find, 2001 SCC 32, [2001] S.C.R. 863, at para. 48.
[31] The fact of the COVID-19 pandemic is notorious and uncontroversial, as are the facts that the government declared a state of emergency and has undertaken various remedial emergency measures to combat the pandemic’s severe health, economic and social effects. However, the legislative context and intention behind the government’s emergency measures and their impact, especially as they pertain to the parties to these proceedings, are not. This is demonstrated by the parties’ respective, divergent pleadings. For example, the motion judge purported to take judicial notice of the respondent’s pleading that it “was required by the Ontario government to close all their storefronts and was limited to takeout and delivery”, which “had an impact on the employment market”. As I have already noted, the appellant did not admit those facts and disputed that her lay-off was the result of the Ontario government’s mandatory pandemic measures.
[32] Under the rule 21.01(1)(a) motion that the respondent chose to bring, the only facts that the motion judge was entitled to accept as true as far as they related to and affected the parties were those in the statement of claim. As a result, there was no basis for the motion judge’s myriad findings, including that the appellant had not resigned from her employment and that the appellant was on an infectious disease emergency leave because of the COVID-19 emergency government-mandated measures and therefore was not constructively dismissed by the respondent.
[33] Moreover, it was incumbent on the motion judge to determine whether the ESA provisions even applied to the appellant’s circumstances. In particular, she failed to consider whether the appellant’s situation fit within the exemptions provided under ss. 5, 6 and 7 of O. Reg. 228/20. She therefore failed to consider whether the appellant was on IDEL because, according to the appellant’s statement of claim, she was put on a “temporary layoff” prior to the filing of the regulation on May 29, 2020. The motion judge was required to accept the statement of claim as true: Beaudoin Estate, at para. 14.
[34] It was therefore not plain and obvious that the appellant’s action could not succeed. Regardless of the motion judge’s interpretation of s. 50.1 of the ESA and O. Reg. 228/20, to which I turn below, she erred in dismissing the appellant’s action which required the adjudication of the material facts that were in dispute and the determination of whether the ESA provisions even applied to the appellant’s circumstances. This adjudication was not possible on a rule 21 motion where the appellant’s pleaded version of the facts is to be taken as true and there was no other evidentiary record.
(b) The motion judge erred in undertaking an interpretation of s. 50.1 of the ESA and O. Reg. 228/20
[35] The motion judge was asked to interpret s. 50.1 of the ESA and O. Reg. 228/20 as they applied to the appellant’s circumstances. Specifically, she was asked to determine whether the IDEL provisions foreclosed the appellant’s common law claim for constructive dismissal during the period of the pandemic.
[36] Unfortunately, the motion judge’s interpretation of s. 50.1 of the ESA and O. Reg. 228/20 was tainted by the analytical errors that I have just reviewed. She erred by following the respondent’s submissions and primarily basing her interpretation of these provisions on her impermissible and unsubstantiated findings concerning the parties’ employment relationship, the appellant’s employment status, as well as the legislative intention and context underlying these provisions, for which there was no evidentiary foundation.
[37] There were myriad disputed issues that affected the interpretation of section 50.1 of the ESA and O. Reg. 228/20 in the circumstances of this case that could not be resolved on a rule 21 motion without evidence.
[38] These issues included the particular circumstances of the parties’ dispute: whether the appellant agreed to the temporary leave as alleged by the respondent; whether she was constructively dismissed from her employment before May 29, 2020; whether she resigned from her employment; whether she met the criteria for deemed IDEL; whether she was owed her ESA entitlements such as termination and vacation pay; and whether she mitigated any common law damages by returning to her employment in September 2020.
[39] They also comprised the issue of the legislative intent and context of section 50.1 of the ESA and O. Reg. 228/20. With respect, I disagree with the motion judge’s adoption of the respondent’s submission that “it should be obvious to the world what the legislature’s intention was by” creating the IDEL and O. Reg. 228/20. As evidenced by the text cited above, section 50.1 of the ESA and O. Reg. 228/20 represented one part of a complicated arsenal of legislative responses to combat the deleterious effects of the world-wide pandemic and were closely intertwined with other legislative provisions outside of the ESA.
[40] The parties rely on the principles of statutory interpretation reiterated by the Supreme Court in Rizzo v. Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 21, citing with approval to Elmer Driedger in Construction of Statutes (2nd ed. 1983): “Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”. The interpretation of the Ontario legislation and regulation in issue must also be guided by s. 10 of the Interpretation Act, R.S.O 1990, c. I.11 that provides that every Act “shall be deemed to be remedial” and directs that every Act shall “receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit”: Rizzo, at para. 22.
[41] In the present case, these principles of statutory interpretation refer not only to the ESA and O. Reg. 228/20, but also to the interrelated pandemic legislation to which the ESA and O. Reg. 228/20 refer. The parties and the motion judge erroneously focused their analysis too narrowly on only some of the provisions of the ESA and O. Reg. 228/20 and did not interpret them in the larger context that was required in the circumstances of this case.
[42] In my view, the respondent’s rule 21 motion was ill advised. Given how intertwined the statutory interpretation issues were with the factual issues, the respondent’s rule 21 motion could not serve its stated purposes of disposing of all or part of the action, substantially shortening the trial or resulting in a substantial saving of costs. The motion judge erred in not dismissing the respondent’s rule 21 motion and further erred in dismissing the appellant’s action on the basis of an interpretation of the statutory and regulatory scheme that she should not have undertaken.
(c) Should this court interpret s. 50.1 of the ESA and O. Reg. 228/20?
[43] The parties urged this court to interpret s. 50.1 of the ESA and O. Reg. 228/20. They submit that even if these provisions are ultimately found not to apply to the appellant’s circumstances in this case, this court’s interpretation of them will nevertheless be useful to the parties and provide guidance on these issues for employees and employers in general. [1]
[44] I am not persuaded by these submissions.
[45] The parties are now essentially seeking a standalone declaration of the meaning of s. 50.1 of the ESA and O. Reg. 228/20. Divorced from any factual foundation, the issue is academic at this stage of these proceedings because it would not resolve the fact-driven dispute between the parties: Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342, at para. 15. As a result, it is at this court’s discretion whether the issue should be entertained and determined at this stage: Borowski, at para. 16. I would refrain from interpreting the provision and regulations. Not only was this remedy not sought in the parties’ respective pleadings, but for the reasons stated above, this panel has neither the record nor the submissions that would permit us to carry out a proper analysis of s. 50.1 of the ESA and O. Reg. 228/20.
[46] As I earlier noted, the present case is a fact-driven case. Whether the provisions apply to the appellant’s circumstances, or if they do not, and whether she can make out a claim for constructive dismissal and damages, are issues very much in dispute. The requested statutory interpretation at large is therefore not necessary at this stage for the determination of the appellant’s action.
[47] The statutory interpretation issue, along with the other issues in dispute, should be remitted to the Superior Court of Justice for determination on a proper record. I note this was the appellant’s position before the motion judge and her alternate position on appeal.
[48] The issues as framed did not require the parties to give the requisite notice of a constitutional question to the Attorney General of Ontario under section 109 of the Courts of Justice Act, R.S.O. 1990, c. C.43. However, it appears to me that the court determining the issue of the interpretation of s. 50.1 of the ESA and O. Reg. 228/20 in the circumstances of this case could very well benefit from submissions from the Attorney General of Ontario with respect to the legislative intent and context of these provisions. The parties should consider whether notice should be given to the Attorney General of Ontario for that purpose.
Disposition
[49] Accordingly, I would allow the appeal and set aside the motion judge’s order, including any costs order in favour of the respondent that may have been made. I would dismiss the respondent’s rule 21 motion and remit the action for determination before another judge in the Superior Court of Justice.
[50] In accordance with my proposed disposition, the appellant would be entitled to her costs of the appeal in the amount of $20,000, inclusive of disbursements and applicable taxes. There will be no costs for or against the intervener.
[51] It is not clear from the record whether the motion judge made a costs order. If she did and the parties are unable to agree on its disposition, I would allow them seven days from the release of these reasons to make brief written submissions of no more than two pages, plus a costs outline.
Released: May 12, 2022 “L.R.” “L.B. Roberts J.A.” “I agree. B.W. Miller J.A.” “I agree. B. Zarnett J.A.”
[1] The parties also reference the statement in the Ministry of Labour’s bulletin on its website that, “These rules affect only what constitutes a constructive dismissal under the ESA. These rules do not address what constitutes a constructive dismissal at common law.” The parties disagree on its interpretive effect. Given my proposed disposition of this appeal, it is not necessary to resolve this issue. However, this dispute highlights the difficulty of this court undertaking the interpretation of s. 50.1 of the ESA and O. Reg. 228/20 without an adequate record, including, as indicated below, the submissions of the Attorney General of Ontario.
