Ontario Creates New COVID-19 Rules for Temporary Layoffs and Terminations
Late in the day on Friday, May 29th, the Ontario Government quietly released a new regulation made pursuant to the Employment Standards Act, 2000 (the “ESA”). Statutory regulations are not normally the stuff of excitement, even for lawyers. Yet this particular regulation, O. Reg. 228/20, Infectious Disease Emergency Leave (the “Regulation”), merits special consideration.
What is the Regulation About?
For many in Canada, the COVID-19 pandemic only really took hold in March 2020. It was that month Ontario officially declared a state of emergency, non-essential businesses were shuttered by government order and many employees began to lose their jobs (or were placed on a temporary layoff). The Regulation is principally an attempt by the Ontario Government to address a by-product of the pandemic - one which relates to existing rules governing temporary layoffs. The ESA normally limits temporary layoffs to a maximum of 13 weeks within a 20-week period (unless special circumstances apply). If employees are not recalled within these 13 weeks, they are deemed at law to have had their employment terminated. Severance payments would then be owed to the dismissed workers. Thus, it is notable that 13 weeks from March 1, 2020 ended on May 31, 2020.
To avoid situations of statutorily forced dismissals of employees temporarily laid-off due to the unique circumstances of the pandemic, the Ontario Government brought in the Regulation. In so doing, Monte McNaughton (Minister of Labour, Training and Skills Development) explained that "[t]his regulatory change will protect businesses from being forced to permanently lay off their employees due to COVID-19 and suffer a financial loss that could shutter their operations for good."
What Does the Regulation Do?
The Regulation creates special rules regarding temporary layoffs and dismissals that will operate during the COVID-19 pandemic. These changes are limited in their application and largely only apply from March 1, 2020 until 6 weeks after Ontario ends its current declared emergency (the “COVID-19 Period”). Note: special rules created by the Regulation (as outlined below) do not apply to unionized workers.
Major changes brought in by the Regulation include:
The existing Infectious Disease Emergency Leave (a job-protected unpaid leave) has been expanded to include situations where “an employee’s hours of work are temporarily reduced or eliminated by the employer for reasons related to the designated infectious disease” and entitlement will extend for the duration of the COVID-19 Period.
Ontario workers originally put on temporary layoff during the COVID-19 Period due to the pandemic will instead be automatically deemed to be on Infectious Disease Emergency Leave. This change has the effect of avoiding situations where employees would otherwise have been statutorily terminated if their period of layoff exceeds that prescribed by the ESA.
Upon their return to work, employees subject to Infectious Disease Emergency Leave will be entitled to be returned to their original job or, if it no longer exists, to a comparable position.
Any temporary reduction in employee hours or pay will not be considered a constructive dismissal for the purposes of the ESA during the COVID-19 Period (though beginning only on May 29, 2020, going forward). This effectively prevents employees from filing claims with the Ministry of Labour for statutory termination pay and severance pay if affected by reduced hours or pay cuts. Note, however, that such loss of hours or pay must be temporary. If employers attempt to utilize the pandemic as a means to institute permanent reductions in pay or hours of work, the Regulation’s protections will not apply.
The exact application of each of these special rules can be quite technical, so employers and employees alike are strongly advised to seek specific legal advice from an employment lawyer prior to acting upon changes brought in by the Regulation.
What are the Limits of the Regulation?
The Regulation is a creature of statute. Thus, its scope is limited to statutory rights and entitlements. This is important as many employees in Ontario have greater rights either prescribed by contract or the common law.
It remains to be seen how the changes brought about by the Regulation may impact such non-statutory rights (if at all). For instance, employees faced with major pay cuts may elect to begin a Court action and assert common law constructive dismissal, a legal avenue not explicitly prevented by the Regulation’s changes. How the Courts will respond to such claims, given that the rationale for the Regulation’s creation may apply equally when adjudicating common law claims, remains a question for another day (albeit one which employment lawyers will argue about furiously in the meantime). Stay tuned!
Vey Willetts LLP is an Ottawa-based employment and labour law boutique that provides timely and cost-effective legal advice to help employees and employers resolve workplace issues in Ottawa and across Ontario. To speak with an employment lawyer, contact us at: 613-238-4430 or info@vwlawyers.ca.
