COVID Temporary Layoff Is Constructive Dismissal Worthy of Punitive Damages

A headhunting firm feeling the financial stresses of COVID-19 put a recruiter making $85,000 a year on temporary layoff. The recruiter claimed constructive dismissal; the firm claimed temporary layoff was legal under the ESA. The Ontario court sided with the recruiter. The contract didn’t allow for temporary layoff. And the argument that the IDEL temporary ban on constructive dismissal lawsuit applied, even had the firm pursued it, wouldn’t wash because the bar covers only constructive dismissal lawsuits under the ESA and not the common law. Result: The court awarded the recruiter just over $178,000, including 15 months’ notice and $25,000 in punitive damages [Fogelman v. IFG, 2021 ONSC 4042, June 2, 2021].