Temporary Relief for Employers – New Employment Standards Regulation

On May 29, 2020, the Ontario government introduced Ontario Regulation 228/20 (the “Regulation”) that amends the Ontario Employment Standards Act, 2000 (the “ESA”) and provides some welcome news to employers impacted by the COVID-19 pandemic.

As a result of COVID-19, many employers were forced to implement temporary lay-offs. Under the ESA, a temporary lay-off is deemed to be a termination of employment after 13 weeks (or 35 weeks if certain statutory conditions are met). Upon this deemed termination, ESA termination pay and, if applicable, severance pay is owed to the employee. Further, many employers also implemented wage/hour reductions, which may have exposed employers to claims that the reduction was a lay-off or a constructive dismissal. Some employers were concerned that they would be exposed to statutory liability through no fault of their own but as a result of the sudden onset of COVID-19 and the closure of economic activity it brought. This is what the Government has tried to address.

The following is a brief summary of the Regulation, which primarily applies to non-unionized employees:

• The COVID-19 Period - The Regulation defines the “COVID-19 period” as the period beginning on March 1, 2020 and ending on a date that is six weeks after the declared Emergency Order is terminated. This period is important as the provisions respecting temporary lay-off and reductions of hours/wages are temporary and only last for the duration of the COVID-19 Period.
  
  
• Deemed Leave of Absence for those on Temporary Lay-Off - Employees that were placed on temporary lay-off after March 1, 2020 as a result of COVID-19 will be deemed to be on infectious disease emergency leave under the ESA. This means that the weeks on lay-off prior to the Regulation will not ‘count’ for purposes of a temporary lay-off. If the employer ceased benefit plan contributions as of May 29, 2020, the employer does not have to reinstate those benefits during the COVID-19 Period. Employees deemed to be on the leave will not have to provide actual notice of their intent to take a leave of absence. It is important to note that employees on leave of absence are treated differently under the ESA than those on temporary lay-off. Notably, those on protected leaves generally have the right to reinstatement.
  
  
• Reduction in Hours Not a Constructive Dismissal Under ESA - A temporary reduction of hours or wages due to COVID-19 and during the COVID-19 period will not trigger claims of constructive dismissal. Additionally, employees will not be deemed to have been temporarily laid-off if their hours or wages were reduced due to COVID-19 and during the COVID-19 Period. This was important to clarify as reductions in wages/hours can be deemed a week of temporary lay-off under the ESA in some cases. The Regulation defines in detail what constitutes a reduction of hours or wages depending on whether the employee has a regular work week or not. Claims filed with the Ministry of Labour regarding a reduction of hours are now deemed to not have been filed if the reduction in hours occurred due to COVID-19 and during the COVID-19 Period.
  
  
• Terminations of Employment - The Regulation does not generally impact terminations of employment or permanent lay-offs that have already occurred. For those employees who are currently on working notice of termination, with consent of both parties that notice can be withdrawn and the employee will be deemed to be on infectious disease emergency leave.

Like all employment standards provisions, the Regulation is complicated and exemptions apply. Legal advice should be sought in relation to any issues arising out of the application of the Regulation.

As the current pandemic and cautious re-opening continues, it is likely that the Government may continue to implement changes to the employment standards regime.  We will continue to update our clients and monitor developments as they emerge.

If you have any questions about COVID-19 and your workplace, or any other human resource law issue, please contact a member of our team. For more information about dealing with COVID-19, please visit our COVID-19 Resource Centre.