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How COVID-19 impacted employment law in 2021

December 22, 2021
By John Hyde

Photo: SolStock/Getty Images

The COVID-19 pandemic has forced employers to make important decisions regarding their workforce and operations.

In doing so, employers have also had to consider newly evolving laws and legal implications affecting their choices.

While the pandemic has impacted workplace laws in unique and unprecedented ways, this article will focus on three of the most significant issues which arose in 2021: the imposition of mandatory vaccination policies; the impact of COVID-19 on reasonable notice periods; and the interplay between emergency leave legislation and constructive dismissal.

The imposition of mandatory vaccination policies

In an effort to protect the health and safety of workers and the public, many employers began implementing mandatory vaccination policies in 2021. These policies required employees to be vaccinated against COVID-19 or face various consequences.


As these policies proliferated throughout workplaces, various legal forums issued directives on their use. For example, the Ontario Human Rights Commission issued a statement explaining that it is generally permissible for employers to mandate and require proof of vaccination.

At the federal level, the Government of Canada recently proposed changes to the Canada Labour Code making vaccination mandatory in all federally regulated workplaces.

In unionized settings, labour arbitrators have also begun rendering decisions on the use of vaccination policies.

In United Food and Commercial Workers Union, Canada Local 333 and Paragon Protection Ltd, an employer who supplied security guards to various businesses implemented a mandatory vaccination policy for its security personnel after the majority of its clients began mandating vaccinated personnel on their premises. The employer also provided a policy exempting employees from vaccination for approved health or religious reasons. The arbitrator determined that both policies were reasonable and enforceable.

In Ontario Power Generation and the Power Workers Union, the employer put in place a program whereby unvaccinated employees were required to partake in Rapid Antigen Testing. Employees who refused to comply with this policy would be placed on an unpaid leave of absence and would have six weeks to reconsider their position or face termination. In finding that the test was a necessary, reasonable, and minimally intrusive way of determining whether unvaccinated workers were fit for work in the context of a deadly pandemic, the arbitrator determined that the vaccination program was reasonable.

The impact of COVID-19 on reasonable notice periods

One of the most significant issues that Canadian courts have had to wrestle with in 2021 was the impact of COVID-19 on reasonable notice periods for terminated employees.

In Yee v Hudson’s Bay Company, the court determined that an employee terminated in August of 2019 could not rely on the pandemic to increase his notice period. Similarly, in Flack v Whiteoak Ford Lincoln Sales Limited, the court refused to consider the pandemic’s effects on market conditions when assessing the reasonable notice period of an employee terminated in January of 2020. In both cases, the courts acknowledged that the pandemic occurred after termination, thus illustrating why COVID-19 would not impact their reasonable notice entitlement.

However, the courts have reached different conclusions in cases where employees were terminated at the onset of the pandemic.

In Kraft v Firepower Financial Corp, the court awarded an employee terminated in March of 2020 additional notice because the pandemic had made the economy and job market uncertain. As well, in Verigen v Ensemble Travel Ltd, the court found that an employer who placed an employee on a series of layoffs over the course of five months prevented her from seeking alternative employment. This was thus a factor in lengthening the employee’s reasonable notice period.

The interplay between emergency leave legislation and constructive dismissal

In response to COVID-19, Ontario enacted the Infectious Disease Emergency Leave Regulation (the “IDEL Regulation”). The IDEL Regulation provides that a temporary reduction in employee wages, or a temporary reduction or elimination of employee hours because of COVID-19, will not amount to constructive dismissal.

In Coutinho v Ocular Health Centre, the court concluded that the IDEL Regulation prevented a plaintiff from claiming constructive dismissal against her employer under the Employment Standards Act, but not under the common law.

A different conclusion was reached in Taylor v Hanley Hospitality Inc. In rejecting the Coutinho decision, the court found that the IDEL Regulation was designed to protect employers from having constructive dismissal claims brought against them as a consequence of having to lay off employees or reduce working hours due to COVID-19.

The bottom line

As we enter 2022, employment law in the context of the current pandemic remains uncertain and everchanging.

Accordingly, employers should obtain expert legal advice and guidance prior to making any decisions regarding their workforce and operations.

John Hyde is the managing partner at Hyde HR Law in Toronto. He advises management on all aspects of employment and labour law, including representation before administrative tribunals, collective agreement negotiation, arbitrations, wrongful dismissal defence and human rights.

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