September 25, 2020

COVID-19 Layoffs – Important Updates You Should Know

The Ontario government has made a number of changes to the Employment Standards Act, 2000 in response to COVID-19 over the past few months.  Understandably, many have found the changes to be confusing. In this Upshot, we provide a high level summary of what the province has done, until now, to address layoffs due to COVID-19.   

Infection Disease Emergency Leave Provisions Enacted

On March 17, 2020, the Ontario Government declared a state of emergency.  

On March 19, 2020, it amended the ESA to include Infectious Disease Emergency Leave (“IDEL”).  Two (2) forms of IDEL were created.  The first applies to orders under the Emergency Management and Civil Protection Act (“EMCPA”) or the Health Protection and Promotion Act.  The second applies as long as COVID-19 is designated as an infectious disease. The leave is available for a variety of reasons, including quarantine and school closures.

Deemed Infectious Disease Emergency Leave 

On May 29, 2020, Regulation 228/20 was introduced under the ESA, effectively deeming all lay-offs and reduced hour arrangements as protected infectious disease emergency leave.  The protected leaves would last until six (6) weeks after the declared emergency under the EMCPA ends.  

The effect of Regulation 228/20 was to suspend the deemed termination provisions under section 56(3) of the ESA.  Under that provision, termination and severance pay is required at the end of a temporary period of lay off (13 or 35 weeks depending on the circumstances).  

Government Extends COVID-19 Period

On July 24 , 2020, Bill 195, Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 came into force.  Bill 195 gives the government the power to extend or amend emergency orders as required, but it also ended the declared emergency under the EMCPA .  As a result, the layoffs and reduced hour arrangements deemed leaves under Regulation 228/20 were scheduled to come to an end on September 4, 2020. 

Absent further legislative change, the 13 or 35 week time period under Section 56(3) of the ESA would commence after September 4th, counting down the time for employer liability for termination and severance pay.  

That legislative change occurred on September 3rd.  

The Ontario government amended Regulation 228/20 to change the definition of “COVID-19 Period” from March 1 2020 to 6 weeks after the declared emergency has ended, to March 1, 2020 to January 2, 2021.  

In effect, the time period during which all layoffs were deemed to be protected leaves of absence would continue until January 2, 2021.  

The Upshot

Employees laid off due to COVID-19 remain on deemed infectious disease emergency leave until January 2, 2021. Thereafter, the 13 or 35 week countdown under the ESA to when termination and severance pay becomes payable, will commence.  

Employees on reduced working hour arrangements as a result of COVID-19 are also deemed to be on infectious disease emergency leave.  

Employees may not, under the ESA, claim constructive dismissal as a result of having been laid off or their hours reduced.  

COVID-19 continues to present significant challenges for employers in their efforts to manage their workforce.  We are always available to guide you through these unprecedented times.