The Ontario Government has announced a further extension to the definition of the “COVID-19 period,” extending the maximum periods of COVID-related temporary layoffs from January 2, 2021 to July 3, 2021, before they are deemed to be terminations under the Employment Standards Act, 2000.
Their goal is to preserve jobs longer, and avoid costly termination and severance costs which, for some businesses, may be the difference between survival and closure.
Under the Employment Standards Act, 2000 and Ontario Regulation 228/20 Infectious Disease Emergency Leave, an employee is entitled to an unpaid leave of absence (known as the Infectious Disease Emergency Leave) if the employee will not be performing the duties of their position because the employee’s hours of work are temporarily reduced or eliminated by the employer for reasons related to COVID-19. Entitlement to this leave is deemed to have started on March 1, 2020 and applies during the “COVID-19 period,” which has now been extended to July 3, 2021 by Ontario Regulation 765/20.
These provisions override the normal provisions in the Employment Standards Act, 2000, which deem a temporary layoff to be a termination after:
- 13 weeks, if no payments or benefits are continued;
- 35 weeks, if certain payments or benefits are continued; or
- for such longer period that an employee retains recall rights under any applicable collective agreement.
Due to COVID-19, the Ontario Government had previously suspended the effect of this provision from September 4, 2020 until January 2, 2021 so that employers could extend temporary layoffs beyond the regular limits. This latest extension to July 3, 2021 means more flexibility for employers in Ontario.
Additionally, the Ontario Government has announced plans to support hard-hit industries by allowing employers to negotiate alternative arrangements with unions for putting termination and severance pay into trust for laid-off employees. Their press release states:
Employers with laid-off unionized workers need to put all potential termination and severance payments in a trust after 35 weeks while employees wait to be recalled to their jobs.
Given the unique challenges that many employers in the tourism and hospitality industries are facing as a result of COVID-19, the government is providing employers and unions the option to use those funds to help keep business doors open. The provision is only available if unions and employers both agree to create alternative arrangements. For instance, an employer and union could agree to only 50 per cent of termination and severance pay being put into trust. Employers will not be able to implement these changes unilaterally.
Miller Thomson’s Labour and Employment Team will continue to monitor these developments and provide updates as they occur.