Ontario Government Attempts to Help Employers by Bolstering Lay Offs

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New Regulation Has Hang Ups: Infectious Disease Emergency Leave, O Reg 228/20

In the midst of the novel Coronavirus disease (COVID-19) pandemic, employers have been raising concerns that the temporary layoff and termination provisions of the Employment Standards Act, 2000 (the “ESA”) are ill suited to address the circumstances they are facing. Meanwhile, many employees have been laid off from work and forced to elect to agree, acquiesce or object to temporary layoffs and assert that they have, in effect, been constructively dismissed from their jobs. Constructive dismissal is a unilateral change to an employment contract by the employer.

As the Ontario state of emergency is repeatedly extended – most recently until June 30, 2020 – employers continue to struggle to manage their workforce while enduring significant revenue losses. Meanwhile, employees continue grapple with difficult decisions about their livelihood and volatile job security.

The provincial government has attempted to respond to these concerns.

New Regulation

On May 29, 2020, the Government of Ontario introduced the Infectious Disease Emergency Leave, O Reg 228/20 (the “Regulation”). The Regulation replaces the previous Infectious Disease Emergency Leave Regulation (O Reg 66/20) and amends the ESA provisions regarding the recently introduced infectious disease emergency leave, layoffs, constructive dismissals and automatic terminations. The Regulation applies mainly to non-unionized employees.

“The Ontario government is taking steps to help ensure that as the economy gradually and safely reopens workers will have jobs to return to and businesses will be protected from incurring unsustainable termination costs,” the government stated in a press release.

The COVID-19 Period

Firstly, the Regulation creates a “COVID-19 period” from March 1, 2020 to six weeks after the current declaration of emergency in Ontario ends. Given the province’s announcement on June 2, 2020 to extend the declaration of emergency to June 30, 2020, the COVID-19 period will expire on August 11, 2020 at the earliest.

Infectious Disease Emergency Leave

The Regulation deems non-unionized employees, whose hours of work or wages were temporarily reduced or eliminated during the COVID-19 period for reasons related to COVID-19, to be on infectious disease emergency leave (“IDEL”) retroactively from March 1, 2020 onwards. The IDEL, which was introduced on March 19, 2020 through an expansion of the emergency leave provisions of the ESA, entitles an employee to an unpaid leave of absence in instances where the employee is unable to work for a broad range of COVID-19 related reasons.

Protections to employees on IDEL such as the right to reinstatement, will apply during the COVID-19 period with some exceptions.

Temporary layoffs not deemed a termination or constructive dismissal

The Regulation provides that a temporary reduction or elimination of hours or a reduction of wages during the COVID-19 period for reasons relating to COVID-19 does not amount to a termination, severance or constructive dismissal for the purposes of the ESA.

The Regulation also allows for temporary layoff to exceed the prescribed length of 13 weeks or 35 weeks under the ESA during the COVID-19 period without amounting to termination, subject to some exceptions.

Employees who were already given written notice of termination during the COVID-19 period will not be considered to be on IDEL unless both the employer and employee agree to withdraw the notice of termination.

Apparent purpose of the Regulation

The government appears to have tried to ‘hit the pause button’ on various ESA layoff, termination and severance provisions in response to the COVID-19 emergency, but it may have missed the mark. By placing many employees on deemed IDEL, some of whom will continue to work on a reduced basis, the Regulation appears to have created confusion and uncertainty.

Manner in which the Regulation was introduced

That the Regulation may have been introduced hurriedly without warning or consultation is no surprise, given present circumstances and given that 13 weeks from the start of the COVID-19 emergency was about to elapse in mid-June. Again, the 13-week mark is significant because the general ESA rule is that a temporary layoff will automatically crystalize into a termination after 13 weeks of layoff in any consecutive 20-week period.

Scope of the Regulation

It is clear that the Regulation limits certain employment standards complaints based on termination due to layoff and constructive dismissal. In fact, complaints already filed with the Ministry of Labour arising from temporary reduction or elimination of an employee’s hours of work or a temporary reduction in an employee’s wages by an employer are “deemed not to have been filed”, provided that the reductions occurred in the COVID-19 period for reasons relating to COVID-19.

Common law constructive dismissal or breach of contract law suits decided by the courts are probably still viable, as the ESA generally does not affect civil remedies of employees against their employers. In other words, an employee’s minimum statutory entitlements to termination and severance pay may be limited, but overlapping and often greater entitlements may be awarded by the courts.

Uncertainty surrounding the end of the COVID-19 period

Again, the Regulation is primarily temporary in nature. The bulk of the provisions last only until six weeks after the COVID-19 state of emergency is lifted in Ontario. After that time, the standard protections of the ESA will re-engage. Employees placed on deemed IDEL will also be afforded the additional protections applicable to ESA leaves. More specifically, employees on an ESA leave, such as the IDEL, are entitled to be reinstated to the position they most recently held, if it exists, or to a comparable position, if it does not. The obligation to reinstate an employee does not apply, however, if the employment relationship was ended solely for reasons unrelated to the leave. It remains to be seen what dismissals may now be in breach of the protections of the ESA for a deemed IDEL.

The lack of clarity is not likely to be resolved in the near future. Presently, court procedural deadlines are effectively on hold and, in the pre-COVID-19 circumstances, it often took years to get to trial. Prior to partial court closures, summary judgment decisions usually took several months to be issued and those are limited to cases where the facts are straightforward enough to be decided without a full trial.

It appears that there will be upheaval and litigation arising from layoffs, constructive dismissals and outright terminations following the COVID-19 period, but those will occur no sooner than August 11, 2020.

In the meantime, employees and employers will need to pay close attention to the dates of layoffs, reductions in working hours/wages and dismissals etc., as there are now a host of triggering dates under the Regulation with various consequences.

Analysis by an employment lawyer of each specific set of events will be necessary to determine what an employee’s entitlements may be. If you have questions about layoffs, constructive dismissals or the changes to the new Infectious Disease Emergency Leave, contact Zubas + Associates. Call us at 416-593-5844 or send an email to info@employment-lawyers.ca.

Coping with the Consequences of COVID-19: A Guide for Employers

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Since the World Health Organization declared a pandemic over the spread of COVID-19 on March 11, 2020, several areas of life, including one’s workplace, have been found to be un-immune to the effects of this super-contagious virus. In Ontario, the sacred employment relationship has evolved to address the reality of COVID-19, spurring endless questions about employee rights and employer obligations.  On March 19, 2020, Bill 186 was fast-tracked through Queen’s Park to amend section 50.1 of the Employment Standards Act, 2000, in order to respond to the changes in circumstances.

To limit their liability, prudent employers must ensure that they are up-to-date on the daily provincial and federal changes taking effect and acting within the new laws while adapting to the business impacts of COVID-19.Some relevant questions employers may have as they contemplate next steps are answered below.

Are there protected leaves of absences that employees are permitted to take?

There are several unpaid leaves which an employee is entitled to under Ontario’s Employment Standards Act, 2000 if they or a member of their family becomes ill. The Act has been amended by Bill 186 to include an “Infectious Disease Emergencies” leave in response to COVID-19. 

New leave of absence for COVID-19

Due to the circumstances arising from COVID-19, the Ontario legislature fast-tracked a new leave of absence called an “Infectious Disease Emergencies” leave. Effective retroactively to January 25, 2020, provincially regulated employees are entitled to an unpaid leave of absence in circumstances including the following:

    • The employee is under individual medical investigation, supervision or treatment related to COVID-19.
    • The employee is in quarantine, isolation or self-isolation implemented as a result of information or directions related to COVID-19 issued to the public or an individual, by a public health official, a qualified health practitioner, Telehealth Ontario, the Government of Ontario, the Government of Canada, a municipal council or a board of health.
    • The employee is under a direction given by their employer in response to a concern of the employer that the employee may expose other individuals in the workplace to COVID-19.
    • The employee is providing care or support to a family member or someone who is like a family member because of a matter related to COVID-19 that concerns that individual, including school or day care closures.
    • The employee is directly affected by travel restrictions related to COVID-19 and, under the circumstances, cannot reasonably be expected to travel back to Ontario.

Unlike other leaves of absence, there is no minimum service requirement prior to assuming the leave, so employees who just started a new job may be entitled to an unpaid leave due to COVID-19.

Other leaves available to employees, as well as their corresponding periods of absence are as follows:

  • Family Medical Leave – up to 28 weeks in a 52-week period
  • Family Caregiver Leave – up to 8 weeks
  • Critical Illness Leave – up to 37 weeks
  • Sick Leave – up to 3 days in each calendar year
  • Family Responsibility – up to three days in each calendar year
  • Bereavement Leave –  up to 2 days each calendar year

Can an employer ask an employee if they have been diagnosed with COVID-19?

Employers must be cautious about invading an employee’s privacy, but employers also have an obligation to maintain a safe workplace. In the context of the COVID-19 pandemic, it may be reasonable for an employer to ask its employees: if they are experiencing symptoms of COVID-19; if they have been in close contact with anyone who has contracted COVID-19; and if they have traveled in the last 14 days. Employers must ensure that they maintain confidentiality of an employee’s medical information, which may be difficult, given that a standard of proper disclosure has yet to be created. Should an employer be unsure as to the proper action taken in the event that they have concerns one of their employees may have COVID-19, it is advisable that they speak to an employment lawyer.

Can an employer ask for a medical note to substantiate an employee’s COVID-19 leave?

Employers are not permitted to ask employees for a medical note to prove their entitlement to a COVID-19 leave, but may ask for evidence supporting the leave that is reasonable in the circumstances. 

Does an employer have to pay its employees if they are in quarantine?

Unless there is a contractual entitlement or workplace policy in place, an employer is not obligated to continue an employee’s pay if the employee is no longer able to work because the employee is in quarantine. Short-term Disability and Employment Insurance may still be available for the employee.

Can an employee refuse to work because of COVID-19?

By way of the Occupational Health and Safety Act, an employee may refuse to work however, they must have a bona fide, or honest belief, that the environment of the workplace is a risk to their health and safety. If a work refusal is commenced, an employer must ensure that they take the correct subsequent steps of an investigation and it is advised that an employer speaks with legal counsel in order to abide with the correct process.

There are certain employees with inherently dangerous jobs, who are generally not permitted to refuse unsafe work. Those who provide emergency or first responder services are included in this group of exempted employees.

In any event, many employees will probably be permitted to take a leave of absence under the new “Infectious Disease Emergencies” leave.

Can an employer temporarily lay-off its employees?

An employer’s top-of-mind question today is whether it is legal for an employer to temporarily lay-off its employees. The simple answer to this is generally: no, unless otherwise agreed. Employers are not permitted to lay off an employee unless it is clearly allowed by the employment contract.

Nonetheless, employers may feel compelled to temporarily lay off employees due to an interruption in business or financial difficulties during this time. Employees may even want to agree to a temporary layoff. If a lay off is not contemplated within the employment agreement, the laid off employee may be entitled to damages as a result of “constructive dismissal” whereby the terms or conditions of the contract have been unilaterally altered.

Many employment contracts do not include a provision which protects the employer and allows them to temporarily lay off its employees, however, employers should contact an employment lawyer to review their contracts. If there is no such provision, employers should be aware of the exposure they will assume if they perform lay offs.

There are also limits around how long an employee lay off can last, after which the employment relationship is often considered to be terminated and the employee may be entitled to termination pay, severance pay, and further entitlements under common law.

Rather than laying off employees, an employer and certain employees may be eligible for Work-Sharing agreements, which they can apply for through Service Canada. Under a Work-Sharing agreement, two or more employees will temporarily work reduced hours while also being entitled to receive Employment Insurance benefits as the employer recovers from an interruption to its normal business. In response to COVID-19, the federal government has increased the maximum duration of Work-Sharing agreements from 38 weeks to 76 weeks. To determine whether your business and workforce may be eligible for Work-Sharing Agreements, contact an employment lawyer.

In order to ensure that policies, legislation and human rights codes are followed, seek legal advice.  Should you have questions about managing employment relationships in the workplace, contact our offices by phone at (416) 593-5844 or email at info@employment-lawyers.ca.