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Aug 28, 2020

Changes Affecting Layoffs Due To COVID-19

In the world of COVID-19, changes to the law are plentiful and frequent. Now that the Ontario government has revoked its declaration of emergency, some temporary changes to employment law are due to end September 4th, 2020. These changes are expected to affect numerous employers and employees across the province.

Infection Disease Emergency Leave

As you may know, in May 2020, the Ontario government adopted a regulation to the Employment Standards Act, 2000 (“ESA”) titled “Infectious Disease Emergency Leave” (O. Reg. 228/20)The regulation was created in response to the COVID-19 pandemic and permitted employers to reduce employee hours or place them on temporary unpaid layoff without amounting to a constructive dismissal. The regulation was rolled out several months into the pandemic and had retroactive application to temporary layoffs implemented from March 1, 2020 onward. Such layoffs were rebranded as “infectious disease emergency leave” (IDEL) and employees were prohibited from claiming constructive dismissal.

Ontario’s Declaration Of Emergency Has Ended 

On July 24, 2020, the Ontario government’s provincial declaration of emergency was terminated and legislation titled “Reopening Ontario (A Flexible Response to COVID-19) Act, 2020” came into effect. As outlined in the act, a six-week clock began ticking towards a return to the old law as it related to temporary layoffs. 

To be clear, the Ontario government has decreed that the temporary changes to the ESA with respect to layoffs will be revoked and the ESA will revert to its original state on September 4th, 2020.

Accordingly, any employees on IDEL (temporary layoff) due to the pandemic may need to be recalled to work by September 4th, 2020 or else the law may deem them constructively dismissed.

Recalling Employees & Severance

Employers who have employees on IDEL (temporary lay-off) should prepare for workers to return by September 4th, 2020 or implement new temporary lay-offs (if permitted by the ESA and contract). If these options are not implemented, employers may face claims of constructive dismissal and be required to pay severance. 

Not all layoffs will become constructive dismissals after September 4, 2020, but many will. We recommend consulting with an employment lawyer at SV Law as soon as possible if you have any concerns about these changes as they relate to your business.

The content of this article is intended to provide a general guide to the subject matter and is not legal advice. Specialist advice should be sought regarding your specific circumstance.