On May 29, 2020, and in light of recent events, the Ontario Government amended the Ontario Employment Standards Act (ESA): Infectious Disease Emergency Leave Regulations 228/20.
New rules in Ontario temporarily pause termination pay entitlements during a pandemic.Tweet
The new rules provide temporary relief for businesses from potentially triggering termination pay or severance to non-union employees who have been temporarily experiencing a reduction in wages or hours of work.
Ontario declared a “state of emergency” on March 17, 2020 and added safeguards to the Emergency Management and Civil Protection Act to protect the most vulnerable population. This included orders for closure of non-essential businesses and put safeguards in place to protect Ontarians. On the advice of the Chief Medical Officer of Health on June 2, the Ontario government recently extended the state of emergency to June 30, 2020. The state of emergency will be in place for an additional six (6) weeks after the Province terminates or changes the status. (Updates on Ontario’s State of Emergency can be found here.)
Job Protection Under Ontario’s ESA
During the declared state of emergency due to COVID-19, an employee who has experienced a reduction in hours or wages will have job protection under the Ontario ESA Leaves. Therefore, employee’s jobs are protected under the ESA from constructive dismissal. This allows the non-essential business to mitigate bankruptcy or trigger constructive dismissal when applying the ESA standards under the Temporary Layoff provision.
This means that businesses who “temporarily laid off” employees between March 1, 2020 and May 29, 2020 will no longer be required to count these weeks towards their thirteen (13) week maximum duration of temporary layoff under the ESA. Businesses will be able to start their ‘count’ of temporary layoff or reductions in wages or hours as of August 11, 2020 (inclusive of the six-week buffer period mentioned above and based on the declared state of emergency on May 12, 2020, subject to change based on Provincial final determination).
The key take away for employees is this:
While Ontario is under the state of emergency, and for six weeks following its end date, employee roles and employment generally is protected under the ESA (the same way as an employee on unpaid leave under pregnancy, parental, or caregivers leave).
Businesses are protected from potentially triggering a termination as a result of an extended reduction in hours or wages due to temporary layoffs beyond the thirteen-week duration. Under normal circumstances, temporary layoff employees up to thirteen (13) weeks within a twenty (20) week or thirty-five (35) weeks in any fifty-two (52) week period without triggering a termination (or constructive dismissal). These efforts are necessary to protect Ontario residents; it has placed financial strain and hardship on many businesses.
Update Your Employment Agreements
What does this mean for your business? Existing employment agreements will not cover the scenarios now protected by the recent ESA amendments.
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Your existing employment agreements do not cover new provisions in the ESA arising from COVID!
Businesses should ensure their employment agreements contain a provision in the event a layoff may occur. Once the thirteenth (13) week or thirty-five (35) week occurs, if there is no intention to reinstate the employee, the employer must pay out termination pay to cease the relationship.
Get HR Experts On Demand
If you are asking your existing employees to sign new employment contracts, there will be questions and maybe even resistance. To work with an HR expert and make sure you’re making all changes effectively, legally and ethically, you can email the HR experts on our Human Experience Team or fill in the form below and we’ll be in touch!