Critical Ontario COVID-19 update on emergency leave, temporary layoffs and constructive dismissals

June 2, 2020 | Zeinab Yousif

By way of a O. Reg 228/20 filed on May 29, 2020 (the “Regulation”) under the Employment Standards Act, 2000 (“ESA”) , the Ontario government has extended the Infectious Disease Emergency Leave to apply to non-unionized employees “whose hours of work are temporarily reduced or eliminated by the employer for reasons related to COVID-19”. The Regulation also stipulates that such employees and those who have their wages temporarily reduced have not been constructively dismissed where the changes occur for COVID-19 related reasons within a defined period of time, reviewed further below. This regulation is welcome news for employers, as it provides relief from deemed terminations and constructive dismissal in such circumstances.

Extension of Infectious Disease Emergency Leave to Employees on COVID-19 Related Temporary Layoffs

The Regulation extends the Infectious Disease Emergency Leave to temporarily laid-off employees. Employees who are on a temporary layoff because their hours were temporarily reduced or eliminated by their employer for reasons related to COVID-19 are now deemed to be on an Infectious Disease Emergency Leave. They will be subject to all of the requirements, entitlements, and prohibitions that apply in respect of a leave under the ESA, with the following exceptions:

  • Employees are relieved of the notice requirements that otherwise apply to them under an Infectious Disease Emergency Leave; and
  • Employee participation in and employer contributions to pension plans, life insurance plans, accidental death plans, extended health or dental plans during the leave are not required if they had stopped as of May 29, 2020. This exemption applies from March 1, 2020 and ends six weeks after the declared emergency ends (“COVID-19 Period”).

Impact on Termination and Severance

The amendment to the Infectious Disease Emergency Leave does not prohibit employers from terminating the employment of an employee whose hours or wages were reduced because of COVID-19. The Regulation provides that if an employer dismisses an employee or otherwise refuses or is unable to continue their employment in such circumstances after March 1, 2020, the employee is not considered to be on an Infectious Disease Emergency Leave.

An employee is also not considered to be on Infectious Disease Emergency Leave if, prior to May 29, 2020, their employment was terminated or severed because:

  • The employer constructively dismissed the employee and the employee resigned from his or her employment in response to the constructive dismissal within a reasonable period; or
  • The employer laid the employee off for a period longer than the permitted period of a temporary layoff under the ESA.

An employee who has been given written notice of termination is not considered to be on Infectious Disease Emergency Leave unless the employer and employee agree to withdraw the notice of termination.

No Constructive Dismissal

As noted above, the Regulation provides that the following circumstances do not constitute a constructive dismissal:

  • a temporary reduction or elimination of an employee’s hours of work by the employer for reasons related to the designated infectious disease during the COVID-19 Period; or
  • a temporary reduction in an employee’s wages by the employer for reasons related to the designated infectious disease during the COVID-19 Period.

It is important to note that this limit on constructive dismissals does not apply to an employee who was constructively dismissed and in response resigned from the employee’s employment within a reasonable period before May 29, 2020.

 

Miller Thomson is closely monitoring the COVID-19 situation to ensure that we provide our clients with appropriate support in this rapidly changing environment. For articles, information updates and firm developments, please visit our COVID-19 Resources page.

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