As many of our readers and clients know, we have been cautioning that the legality of certain layoffs and job changes necessitated by COVID-19 is uncertain. Generally, layoffs are only legal if the employment contract gives the employer the right to layoff, and many other job changes, such as reductions in hours or pay, raise the risk of constructive dismissal. We anticipated that at some point the Ontario government may weigh in and change the law – on Friday they did.
Note that none of these changes apply to unionized employees.
On May 29, 2020, the Ontario government tabled a new Infectious Disease Emergency Leave regulation under the Ontario Employment Standards Act (“ESA”). This new regulation, O. Reg 228/20 changes the previous Infectious Disease Emergency Leave O. Reg. 66/20 which established job protection for workers who needed time off due to various impacts of COVID-19. See our blog on the Infectious Disease Emergency Leave for more details. This previous, more limited leave applies for the period January 25, 2020 to March 1, 2020 and to unionized workers. Job protection means that workers who assert their right to this leave cannot be terminated for not working.
- Reg 288/20 has changed things up quite a bit and greatly expanded job protection under the leave, as well as changed the impact of layoffs and job changes.
The Really Big Change for Employers
- The expansion of job protection widens an employer’s options regarding terminations and layoffs for employees who may be redundant due to COVID slowdowns.
- Employees who have had their hours reduced or cut altogether due to COVID slowdowns starting March 1, 2020, and onwards, and lasting until six weeks after the day that the State of Emergency in Ontario is terminated, are now – in most cases – deemed to be on the Infectious Disease Emergency Leave.
So upcoming terminations could be impacted and an employee’s ability to do anything about past layoff and job changes – which could have been constructive dismissals under the ESA – are curtailed with certain exceptions.
A note about benefits: employers who did not continue their employees’ participation in benefit plans when job changes were made (hours reduced, laid off etc.) prior to May 29, 2020 do not have to re-instate those benefits. Otherwise, benefits should be continued during the leave.
Impact on Employees Who Were Laid Off or Had Hours or Pay Reduced
Many employees were unlawfully laid off or had their pay or hours cut – either partially or completely. Normally these types of drastic job changes would entitle an employee to assert a constructive dismissal claim and their right to notice of termination (notice pay and possibly severance pay). O.Reg 288/20 takes away that right going forward from May 29, 2020, as far as the ESA is concerned – a constructive dismissal claim could still go forward under the common law. These employees will now be deemed to be on the Infectious Disease Emergency Leave.
Similarly, employees on layoff are now deemed to be on an unpaid leave of absence – the Infectious Disease Emergency Leave. This will not be the case however if the layoff has already lasted too long (generally more than 13 weeks) or the employee has already asserted a constructive dismissal in response to the layoff within a reasonable period.
Being on a leave gives these employees the right to return to their job – should it still exist – when the leave is over. The leave will be over on the day that is six weeks after the end of the State of Emergency in Ontario.
Terminations Prior to May 29, 2020
Employees who were terminated prior to May 29, 2020, are not impacted. These terminations stand. Similarly, if employees were on layoffs that expired prior to May 29, 2020 (lasted longer than 13 weeks in most cases) or where employees asserted constructive dismissal and resigned within a reasonable time these employees will not be deemed to be on the Infectious Disease Emergency Leave. Wrongful dismissal actions will still go ahead for these employees.
Upcoming Terminations and Layoffs
O.Reg 288/20 says as of March 1, 2020, an employee whose hours of work are temporarily reduced or eliminated for reasons related to the designated infectious disease are deemed to be on the Infectious Disease Emergency Leave. They, therefore, have job protection under the leave and cannot be terminated. They have a right to return to their job, or a comparable job, when the leave is over – should their job still exist.
The regulation also says that an employee is not on leave if their employment is terminated on or after March 1, 2020. This suggests that employers can still proceed with upcoming terminations in most cases but would also have the option of putting employees on the leave and recalling them at some point or terminating them if their job no longer exists six weeks after the State of Emergency is over.
Employees on the Infectious Disease Emergency Leave following May 29, 2020, should have their benefits continued. They do not need to be otherwise paid and will be eligible for the CERB.
For many employers, this is good news. It simplifies the legal risk associated with the necessary job changes so many have had to make. Where there is limited work available, most employees who were not already terminated or who did not assert a constructive dismissal within a reasonable period will now be on the Infectious Disease Emergency Leave. Note that the law is unclear on what “within a reasonable period” means and this may be different in different situations.
For employees, many of whom may have thought that they were in a legal position to assert their termination entitlements are now not. Common law rights remedies for illegal layoffs and constructive dismissal still stand, but it’s fair to say that access to justice has been impeded.
If you need help understanding how O.Reg 288/20 impacts your situation get in touch for a consultation.