In L. v. S. Automotive Group Inc., the Ontario Superior Court of Justice confirmed an important principle for employees: even during a crisis like COVID-19, your rights to reasonable notice remain protected — and your prior service may still count if you were induced to return to work.
What Happened?
The employee was a mechanic who had worked for the defendant for nearly six years over two periods of employment. After leaving for another job for about nine months, he was persuaded to return. The employer promised he would be treated as though he had never left, including recognition of prior service for benefits and vacation.
In March 2020, at the start of the COVID-19 pandemic, the employer placed technicians on temporary layoff. It later proposed a new compensation structure that removed guaranteed minimum hours, which would likely have reduced the employee’s income.
The employee treated the layoff as a termination of employment.
Key Takeaways for Employees
1. A Temporary Layoff May Be a Constructive Dismissal
Unless your employment contract clearly allows temporary layoffs, an employer cannot unilaterally send you home without pay. Even if described as “temporary,” a layoff can amount to constructive dismissal.
In this case, because the employment agreement did not permit layoffs, the court found the employee was constructively dismissed when he was first laid off.
2. A Pandemic Does Not Automatically Eliminate Notice Rights
The defendant argued that COVID-19 was an extraordinary event that excused it from providing reasonable notice. The court rejected that argument.
While the pandemic created serious economic challenges, it did not remove the employer’s obligation to comply with employment law.
3. Prior Service Can Still Be Credited After a Break
Generally, when employment ends and later resumes, the notice “clock” restarts.
However, courts may treat service as continuous if:
- The employee was induced to return, and
- The employer recognized prior service or promised continuity.
Here, because the employer encouraged the employee to return and acknowledged his prior service, the court credited his earlier years of employment when calculating notice.
The Outcome
The defendant argued the employee was entitled to only a few weeks of notice based on his most recent period of service. The court disagreed.
Taking into account the employee’s total tenure, the inducement to return, and the economic climate at the time, the court awarded seven months of reasonable notice.
Why This Matters for Employees
This decision confirms that:
- Temporary layoffs may trigger termination rights if not contractually permitted.
- Economic crises do not automatically eliminate notice obligations.
- If you were recruited back to a company, your earlier service may still count toward reasonable notice.
If you have been placed on a temporary layoff or offered significantly changed terms of employment, it is important to understand how your contract and employment history affect your rights.
Contact Monkhouse Law Employment Lawyers offer a free 30-minute phone consultation to help you assess your situation and understand your options.