December 23, 2020
On December 17, 2020 the Government of Ontario issued a news release in which it announced the adoption of additional measures to provide support to employers and employees impacted by COVID-19. These measures include an extension of the period of time during which layoffs or a reduction in hours or wages are deemed not to constitute a termination of employment pursuant to Ontario’s Employment Standards Act, 2000 (the “ESA”).
Employers will recall that on May 29, 2020, the Government of Ontario passed Regulation 228/20 (“the Regulation”) under the ESA to provide employers with temporary relief from certain of the ESA’s deemed termination provisions where their operations slowed or halted due to COVID-19 (a Regulation that we discussed previously, here).
Specifically, the Regulation provides that non-unionized employees whose wages or hours of work are temporarily reduced or eliminated due to COVID-19 are not considered to be laid-off under the ESA. Instead, these employees are deemed by statute to be on a newly created “Infectious Disease Emergency Leave”. This means that employers are exempt from ESA notice or severance pay obligations regarding any qualifying non-unionized employees, who, but for the Regulation, might have otherwise been deemed terminated by the ESA. For example, employees laid off longer than the statutory limit for temporary lay-offs are no longer deemed terminated.
The Regulation’s exemptions were set to apply from March 1, 2020 until January 2, 2021 (the “Covid-19 Period”). However, the Ontario Government has now passed a further regulation to extend the COVID-19 period to July 3, 2021. This is a significant development for employers, as it means that non-unionized employees whose wages or hours of work are temporarily reduced for reasons related to COVID-19 continue to be considered on Infectious Disease Emergency Leave, rather than laid-off or terminated. (Notably, however, severance entitlement remains where the business is closed on a permanent basis.)
Finally, it is important to note that these regulations only affect the minimum statutory rights of non-union employees in Ontario. Unilateral reductions in hours or wages, or the implementation of lay-offs not authorized by contracts of employment may, in some occasions, result in claims of wrongful dismissal at common law, rather than claims for termination or severance under the ESA.
Our firm will continue to provide you with updates as the Ontario Government’s response to the COVID-19 pandemic evolves.
The foregoing is for informational purposes only and should in no way be relied upon as legal advice. For legal advice tailored to your circumstances and business, please contact any of SOM LLP’s lawyers by email or telephone.