Ontario employers take note: in a surprise announcement on September 3, 2020, the provincial government announced that it had extended its freeze of temporary layoff limitations. Regular layoff rules had been set to resume on September 4, 2020. Pursuant to O. Reg. 492/20, this date has now been pushed back to January 2, 2021.
Ontario employers are ordinarily required to pay severance when workers are placed on layoff (i.e. provided no work or pay) for longer than 13 weeks in any 20-week period (subject to certain exceptions). When the COVID-19 pandemic struck, however, these traditional worker protections would have resulted in mass terminations of employment across Ontario, largely due to government-ordered shutdowns.
Through O. Reg. 228/20 (made public on May 29th), Ontario suspended the operation of normal temporary layoff rules. In their place, for the period between March 1 and September 4, 2020, any situation related to the pandemic where employee hours were temporarily reduced (or eliminated altogether) was deemed to be unpaid “Infectious Disease Emergency Leave”. The deeming of Infectious Disease Emergency Leave was retroactive; it overrode any prior temporary layoffs employers may have instituted going back to March 1, 2020.
What does this mean?
As a result of the extended freeze of normal temporary layoff limitations until January 2, 2021, Ontario employers have much greater latitude to keep employees off work without triggering a dismissal (and incurring related severance costs).
Indeed, in the right circumstances, it may now be possible to keep employees off work without pay as late as September 4, 2021. This can occur by means of an employer placing workers on temporary layoff (as provided for in the Employment Standards Act, 2000) at the end of deemed Infectious Disease Emergency Leave. Prior to putting workers on a temporary layoff, however, employers should carefully review their staff employment agreements to make sure they have a contractual right to pursue this course of action and not risk a claim for constructive dismissal.
Seek legal advice before acting
The state of employment law in Ontario has been continually shifting throughout the pandemic. Employers have often been given very short notice of major legal changes (sometimes less than 24 hours). Knowing what may be coming, and being able to react accordingly, can help employers avoid unnecessary stress and cost. To that end, be sure to remain in close contact with your normal HR and legal advisors to ensure your organization remains on the right side of the law.
Vey Willetts LLP
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