The Ontario government has recently implemented Ontario Regulation 764/20: Terms and Conditions of Employment in Defined Industries – Hospitality, Tourism and Convention and Trade Show Industries (the “Regulation”), a regulation under the Employment Standards Act, 2000 (ESA) designed to aid Hospitality, Tourism, Convention, and Trade Show Industries that are being hit hard by the COVID-19 pandemic.

The Regulation allows unions and employers in these Industries with an alternative to putting termination and severance pay into trust for employees laid-off for 35 weeks or more in a 52 week period, and who are waiting to be recalled.

This Regulation, applies only to the unionized employers. Non-union employees remain on Infectious Disease Emergency Leave as explained in our in our In A Flash Ontario Government Extends Suspension of Temporary Layoffs to July 3, 2021.

Under the ESA, unionized employees who have been laid off for more than 35 weeks in a period of 52 consecutive weeks will generally be deemed terminated. Ordinarily, unionized employees whose layoff reached this 35 week threshold, had the right to elect whether to (a) accept termination, forfeit recall rights, and receive termination and severance pay; or (b) retain recall rights, in which case the employer and union would negotiate an arrangement to hold the employee’s termination and severance pay in trust.

Under this new Regulation, unions and employers can agree not to apply the current election rules. They can negotiate alternative arrangements while retaining employees’ recall rights and this can be done on behalf of some or all employees in the bargaining unit. This means that employers can negotiate with unions to provide less than the full termination and severance pay amounts to be held in trust, effectively providing employers with additional funds to stay operational and thereby preserving a job for employees to be recalled to.

To summarize:

• Where the parties have agreed to apply the Regulation and the union elects to retain recall rights on behalf of its bargaining unit members, the need to place termination and severance pay into trust is temporarily eliminated;
• Employers and unions can agree to extend the time that employees will remain on layoff with recall rights, and delay the time when termination and severance pay would need to be paid;
• The Regulation preserves the right of individual employees to make an election in two specific circumstances:
  1. If the employee elects before the trade union makes its election under the agreement with the employer; or
  2. If the union fails to make an election.

In either option, the employee may elect to renounce their recall rights and be paid any termination and severance pay owing.

This Regulation remains in place for one year and is set to expire on December 17, 2021. Employers looking to utilize these changes and negotiate with their unions are encouraged to contact a Mathews Dinsdale lawyer, or refer to the Firm’s COVID-19 website resources.