New Ontario Reg. Helps Non-Union Employers who Implemented Layoffs or Wage Cuts

A new Ontario regulation (Reg. 228/20) (Regulation) under the Employment Standards Act, 2000 (ESA), is a new development for non-union employers that assists employers who have had to temporarily layoff staff due to COVID-19. With these changes, temporary layoffs of employees for reasons related to COVID-19 convert to a new "infectious disease leave," and there have been changes to grounds for "constructive dismissal" during the pandemic. The Regulation was filed on May 29, 2020, and is effective immediately.

With this change, layoffs during any period from March 1, 2020, until six weeks after Ontario's state of emergency ends, and those who have been laid off “for reasons related to COVID-19”, are now be considered to be on "infectious disease leave" – and no longer on temporary layoff. This change impacts employers by "stopping the clock" on automatic terminations under the ESA for layoffs that exceed the maximum of 13 weeks. It’s also important to note that since the layoff is now a “leave of absence” under the ESA, the obligations relating to leaves of absence apply to the formerly laid-off employees who are now on leave. This means that the employee is entitled to his or her most recently held job when the infectious disease leave ends or, if that job no longer exists, to a “comparable position.”

The most significant change is to the grounds for constructive dismissal. Now, pay and hours cuts for reasons related to COVID-19 and during the period from March 1, 2020, until six weeks after Ontario's state of emergency ends, are not a "constructive dismissal." This is a key development. Pre-COVID-19 case law in Ontario had indicated that a temporary layoff of a non-union employee was a constructive dismissal unless the employee's contract permitted temporary layoff, or the employer had a history of temporary layoffs or an enforceable temporary layoff policy.

The OGCA thinks that these regulations will be a big help to many contractors. However, as with any critical new legal development, lawyers expect disputes regarding some of the Regulation's language. Especially regarding what does/does not constitute constructive dismissal. Employers should communicate those that have been temporarily laid off about this change to their status and inform employees that the clock is no longer running as they will not be subject to automatic termination and communicate that any changes to pay are temporary.

You can find a summary of this information and examples about how it can impact your business by clicking here.