LAYOFFS IN ONTARIO - THE NEW DEAL FOR THE PANDEMIC - CANNOT BE A TERMINATION UNDER ONTARIO'S LEGISLATION. WHAT YOU NEED TO KNOW.....

CHANGES TO THE ESA DUE TO COVID-19

On May 29, 2020, the Ontario government enacted Regulation 228/20 – Infectious Disease Emergency Leave (“Regulation”) under the Employment Standards Act, 2000 (“ESA”).

It offers Ontario employers impacted by COVID-19 with temporary relief from the ESA’s rules on temporary layoffs, termination, severance and constructive dismissal, by deeming an employee to be on unpaid, job-protected Infectious Disease Emergency Leave (“IDEL”) in specific, but not all, circumstances. 

These changes apply solely to non-unionized employees, including assignment employees who are employed by temporary help agencies.

Deemed to be on IDEL 

As opposed to being placed on a temporary layoff, an employee who does not perform their duties because their hours of work have been temporarily reduced or eliminated due to COVID-19 during the “COVID-19 Period” is deemed to be on IDEL.

The “COVID-19 Period” is defined under the Regulation as the period beginning on March 1, 2020 and ending six weeks after the state of emergency in Ontario comes to an end.

IDEL is an unpaid, job protected leave which came into effect under the ESA on March 19, 2020. It has certain conditions to qualify, one of which is a need to provide childcare to children due to Ontario's school closures. .

Under the ESA, an employee on a statutory leave of absence is entitled to continue to participate in benefit plans for the duration of the leave.

However, this new Regulation provides an exception - as of May 29, 2020, if an employee ceased participation in the employer’s benefit plan, or the employer ceased contributions to a benefit plan, the employer is exempt from the general requirement that it continue benefits during an ESA leave.

Employees will not be considered on IDEL if, at anytime on or after March 1, 2020, the employer:

  • terminates/severs the employee’s employ;
  • closes its entire business at an establishment; or
  • has given or gives notice of termination to an employee and the employee resigns in response as specifically provided under the ESA.

Similarly, employees will not be considered on IDEL if, before May 29, 2020, the employee had been:

  • deemed terminated or severed under the ESA because of their layoff; or
  • constructively dismissed and had resigned within a reasonable period.

Where an employee has been given written notice of termination, if the employer and the employee agree, the notice of termination can be withdrawn and the employee can be deemed to be on IDEL.

Reduced Hours/Wages

For an employee whose hours of work have been temporarily reduced or eliminated, or whose wages have been temporarily reduced, for reasons related to COVID-19 during the COVID-19 Period, the usual ESA termination and severance provisions related to layoffs will not apply.

That is, these employees will not be considered to be laid off for the purposes of the ESA during the COVID-19 Period.

The usual ESA rules remain in place if:

  • the employee is or was laid off as a result of a complete closure of the employer’s business at an establishment; or
  • before May 29, 2020, the employee had already been deemed terminated or severed under the ESA because of their layoff.

The Regulation also deems certain circumstances not to constitute a constructive dismissal under the ESA if they occur during the COVID-19 Period, and are for reasons related to COVID-19:

  • a temporary reduction or elimination of an employee’s hours of work.
  • a temporary reduction in an employee’s wages.

However, employees may still claim that such a reduction/elimination constitutes a termination if the employee resigned within a reasonable period before May 29, 2020.

Existing ESA Complaints

Subject to a few exceptions, complaints filed with the Ministry of Labour claiming that a temporary reduction or elimination of an employee’s hours of work, or a temporary reduction in an employee’s wages, constitutes a termination or severance of employment are deemed not to have been filed if the reduction or elimination occurred during the COVID-10 Period for reasons related to COVID-19.

Exemption - where an employee’s employ was deemed terminated before May 29, 2020 because they were laid off for a period longer than a temporary layoff under the ESA.

If so, the employee would still be able to file an ESA complaint if they were not paid their termination and severance (if applicable) entitlements.

In addition, where an employee was constructively dismissed and had resigned within a reasonable period before May 29, 2020, that claim would be allowed to proceed.

The Regulation also addresses how to determine if an employee’s hours of work or wages have been reduced.

For example, where an employee has a regular work week, the employee’s hours of work will be considered reduced if the employee works fewer hours in the work week than they worked in the last regular work week before March 1, 2020.

Where the employee does not have a regular work week, the average number of hours worked in the 12-week period before March 1, 2020 is to be used for comparison purposes.

Important Notes

While this Regulation appears to creatively provide temporary protection to Ontario employers, remember  the pre-existing ESA rules, including the deemed termination provisions for exceeding the temporary layoff period, will apply once the COVID-19 Period expires, unless the Ontario government further intervenes.

Furthermore, for any layoffs that preceded March 1, 2020 and were COVID-19-related, the COVID-19 Period effectively stops the clock on the layoff. 

This is a temporary measure - anticipate the usual rules for lay off will apply again at the end of the defined Covid-19 Period, including the 13-week, rolling threshold for temporary layoffs under the ESA.   

Lastly, note that this Regulation does not impact an employee's right to claim constructive dismissal at common law, which remains preserved and an option. The Ontario government has yet to decree otherwise.   

The Regulation is here: 

https://www.ontario.ca/laws/regulation/r20228

 

 


Thank you for reading this - Jason Ward of WARDS LAWYERS PC.

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This WARDS LAWYERS PC blog is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

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