New Ontario Regulation Modifies Treatment of Layoffs Related to COVID-19

On May 29, 2020, the Ontario Government published O. Reg. 228/20: Infectious Disease Emergency Leave under the Employment Standards Act, 2000 (the “ESA”).  The Regulation, which also came into force on May 29, 2020, temporarily amends the treatment of layoffs under the ESA to respond to the effects of the ongoing COVID-19 pandemic on Ontario workplaces.

Temporary Layoffs Deemed Emergency Leave

One key effect of the new Regulation is that it retroactively deems employees whose hours of work have been temporarily reduced or eliminated as a result of COVID-19 on or after March 1, 2020 to be on “infectious disease emergency leave”. 

Infectious disease emergency leave is a statutory leave that was added to the ESA on March 19, 2020.  It is an unpaid, job-protected form of emergency leave that is available to an employee who is not performing the duties of his or her position due to prescribed reasons related to COVID-19 (see our previous publication here for full details).

By deeming employees whose hours of work or wages have been temporarily reduced due to COVID-19 to be on infectious disease emergency leave, the Regulation provides those employees with all of the protections applicable to statutory job-protected leaves, including the right to reinstatement.  One notable exception is that an employer is exempt from the normal requirement to continue contributions to a benefit plan while an employee is on a protected leave if the employer was not making benefit plan contributions prior to May 29, 2020 for an employee on layoff due to COVID-19.

Employees will not be deemed to be on infectious disease emergency leave if they were dismissed or permanently laid off after March 1, or have already been given notice of termination.

Layoffs Deemed not to be Terminations or Constructive Dismissals

The Regulation also deems that employees whose hours of work or wages have been temporarily reduced due to COVID-19 are not terminated, severed or constructively dismissed for the purposes of the ESA, even if their hours or wages have been reduced or eliminated for a period that exceeds the prescribed length of a “temporary layoff” of more than thirteen weeks or thirty-five or more weeks (if certain criteria are met).  ESA complaints alleging that an employee has been terminated or severed as a result of a reduction or elimination of hours or wages due to COVID-19 will be deemed to have not been filed.

However, the application of this deeming is not retroactive.  Layoffs that exceeded the length of a “temporary layoff” prior to May 29 will still constitute terminations/severances for the purposes of the ESA. 

The Regulation is designed to be a temporary response to the impacts of COVID-19.  The changes prescribed by the Regulation apply only in the “COVID-19 period”, which is defined as the period from March 1, 2020 until 6 weeks after Ontario’s emergency order is terminated. 

The Regulation also does not apply to unionized employees.

We will continue to update our clients with information as soon as it becomes available. If you have any questions about this topic, other COVID-19 related questions, or would like assistance with developing and/or reviewing pandemic plans, please do not hesitate to contact a Mathews Dinsdale lawyer, or refer to the Firm’s COVID-19 website resources.

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