Caveat: The information below is not legal advice. The Regulation is ambiguous in parts and exemptions apply.
As we reported earlier, on May 29, 2020, the Ontario government amended the Employment Standards Act, 2000 (the “ESA”) through Ontario Regulation 228/20. The stated purpose is to prevent businesses from “unsustainable termination costs” and facilitate the recall of employees temporarily laid off. The government sought to achieve these aims by effectively placing all employees whose hours of work were temporarily reduced or eliminated for reasons related to COVID-19 on a deemed leave. As such, many employees will lose their right to claim termination and severance pay under the ESA if they remain on a leave from work due to COVID-19, including related economic disruptions caused by COVID-19.
Since the introduction of the Regulation, there has been considerable debate within the employment bar about how broadly it should be interpreted. Unfortunately, we won’t have final answers until the Regulation is considered by the Ontario Labour Relations Board and/or the Courts.
This is what we know so far:
- Who is covered: Employees are on the deemed leave if a) they are non-unionized; b) their hours of work were reduced or eliminated; c) the reduction/elimination is temporary; and d) the reduction/elimination is related to COVID-19.
- Who is not covered: Employees are not on a deemed leave if a) they were terminated prior to the enactment of the Regulation; or b) their hours of work were permanently reduced or eliminated.
- Duration: The deemed leave applies during the “COVID-19 period”. This is a rolling period defined as starting March 1, 2020 and ending six weeks after the day that the emergency order is lifted.
- Termination entitlements: The Regulation provides that a temporary reduction in hours, an elimination of hours or a temporary reduction in wages does not constitute constructive dismissal under the ESA. This is a significant change that limits employee rights. The Regulation goes one step further – Ministry of Labour complaints that were already filed asserting constructive dismissal during the COVID-19 period are deemed not to have been filed.
Answers we still need:
- At what point is a reduction or elimination in hours not considered “temporary”?
- Once an employee is on the deemed leave, is it job-protected in the way of, say, parental leave or can an employer still terminate their employment for reasons related to COVID-19?
- Can an employee pursue a constructive dismissal claim in court?