Temporary Layoffs in Ontario Due to Coronavirus and Employee Rights

The information in this blog post is current to January 7, 2021.

The COVID-19 pandemic and its associated economic impact have created many significant challenges for both employers and employees in Ontario. Ontario made a declaration of emergency on March 17, 2020 and has ordered a shutdown of several sectors of the economy. Many employers operate in businesses that are not deemed essential and cannot viably operate in a remote-working model. As a response to a slowdown in business many employers invoked the temporary lay-off provisions in the Employment Standards Act (ESA) and have placed employees on temporary lay-offs. Employees in this position are not terminated from their employment but they do not receive wages during their temporary layoffs.

On May 29, 2020, Ontario introduced an update to the Employment Standards Act, 2000, that retroactively converts layoffs that were started on or after March 1, 2020 into “Infectious Disease Emergency Leaves” during the “COVID-19 period“, meaning March 1, 2020 and ending on July 3, 2021. These updates only affect non-unionized employees.

How do the new rules affect employees in Ontario?

Under the new rules, employees who:

  • have had their hours reduced or eliminated for reasons related the COVID-19 pandemic; or
  •  are not performing the duties of her position as a result;

will be deemed for ESA purposes to be on an unpaid, job-protected leave called Infectious Disease Emergency Leave.

The new rules apply to all work or pay reductions and layoffs related to the pandemic from March 1, 2020 and until January 2, 2021.

How do the new rules affect temporary layoffs in Ontario?

Under the new rules, all layoffs related to COVID-19, for which the Deemed Termination Period (defined below) has not lapsed prior to May 29, 2020, during the COVID-19 Period are now unpaid, job-protected emergency Infectious Disease Emergency Leave. Prior to the May 29, 2020 change, a temporary layoff was allowed only if expressly provided in the employment agreement. The Deemed Termination Period for a layoff is::

  1. If the employer is not contributing to the employee’s benefits plan, the layoff could last for 13 weeks.
  2. If the employer is contributing to the employee’s benefits plan, the layoff could last 35 weeks.

If the employee was not recalled to work before the end of the Deemed Termination Period, the employee would have been deemed to be terminated and would be owed notice of their termination.

How do the layoffs covert into the job-protected leaves?

The conversion of temporary layoffs into the job-protected leave is automatic. There is no requirement to notify your employer that you are taking this leave.

If your employer has stopped making contributions to your benefits plan as of May 29, 2020, you are still considered to be on this leave.

What legal options do employees have?

Employees who have been laid off or had their hours or pay reduced as a result of COVID-19 will not be able to apply to the Ministry of Labour with a complaint regarding the layoff or for the work or pay reduction. However, employees still have access to judge-made law remedies. Those affected by the reduction in hours or temporarily laid off will still have access to judge-made remedies, such as constructive dismissal and breach of contract at common law.

If you have been laid off or your workload has been reduced or changed or your pay has been cut during the COVID-19 pandemic, it is a good idea to contact an employment lawyer at Monkhouse Law. We will help you know your options and get your entitlements.

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