Sep 11, 2020  By John Hyde

Ontario government provides more support for employers

Ontario government provides more support for employers

Ontario employers can breathe another sigh of relief.

On the precipice of thousands of temporary layoffs in Ontario becoming automatic terminations, the Ontario government has just announced, once again, that it will extend the period by which employers can temporarily lay off employees, to January 2, 2021.

This should be welcome, if not last minute, news for employers faced with imminent personnel decisions, as the previous deadline to temporarily lay off employees was set to expire.

What this means

Prior to COVID-19, any attempt by an employer to unilaterally change the fundamental terms of the employment relationship, such as by refusing to pay an employee or provide them with any work, was clearly a constructive dismissal.

It has long been the case that, absent a term in an employee’s contract permitting a temporary layoff, or a pattern of temporary layoffs which the employee has consented to, there was no inherent right for an employer to temporarily lay off an employee. Such conduct by the employer would entitle an employee to file a complaint at the Ministry of Labour, or to sue their employer, claiming constructive dismissal.

That was despite the fact that the Employment Standards Act, 2000 (“ESA”) outlined the maximum period of time an employer could temporarily layoff an employee before it was automatically deemed a termination – that is, 13 weeks if the employer provided no benefits, or 35 weeks with benefits. What the ESA had never done, until recently, is provide any kind of inherent right to temporarily lay off an employee without consequence.

That all went out the window at the height of the pandemic. Faced with mounting and impossible commitments to employees, employers began to temporarily lay them off en-mass, “pursuant to the ESA”, and the clock began ticking on their automatic terminations. Employees, fearful of losing their livelihoods, mostly acquiesced to being constructively dismissed. This, however, did not change the fact that their temporary layoffs were marching towards automatic terminations, triggering looming and impossible termination obligations for employers.

As the clock was set to expire, the Ontario government stepped in and made unprecedented changes to the ESA on May 29, 2020. Gone were the rights of employees to complain to the Ministry of Labour that they had been constructively dismissed as a result of a temporary layoff on account COVID-19. The clock effectively stopped ticking on their automatic terminations. Instead, they were deemed to be on a job protected leave (the Infectious Disease Emergency Leave, or “IDEL”), while their employment hung in stasis.

Employers all breathed a collective sigh of relief - at least until September 4, 2020.

Despite the re-opening of much of Ontario’s economy during Stage 3, it was clear many business had not fully recovered, if at all, as we approached the end of summer. In response, the government has just announced that the May 29, 2020 changes have been extended to January 2, 2021. Employers can now exhale until the new year.

Although they continue to be insulated from constructive dismissal claims, or deemed terminations, under the ESA, employers must still pay close attention to their various obligations under workplace legislation.

Employees on the IDEL enjoy many job-protected rights, such as not having any of their benefits adversely affected, as well as a right to reinstatement. Employers can therefore find themselves in hot water if they seize on the IDEL to simply avoid recalling employees who require special accommodations in favour of replacing them with more agreeable, less costly employees.

When they recall employees to work, employers must ensure they are complying with health and safety obligations which are constantly evolving.

Further, if employers are considering allowing work from home, on a partial or at least graduated basis, they will want to consider whether that will become a term of the employee’s contract going forward. If the intention is for it to be temporary, employers must make this clear, or risk it becoming the status quo.

Finally, employers will want to consider that the IDEL may not insulate them from lawsuits for constructive dismissal: all we know for certain is that employees on the IDEL cannot complain to the Ministry of Labour that their layoffs constitute a constructive dismissal, thus entitling them to their statutory minimums under the ESA (one week’s notice per year of service, up to 8 weeks). Technically, there is nothing precluding a disgruntled employee on the IDEL from filing a court action alleging constructive dismissal, thus entitling them to their common law notice entitlements, which are far greater than those under the ESA (i.e. up to two years of notice). Employers facing such a claim, or the threat of such a claim, should quickly seek the advice of counsel.

If you have any questions about your obligations in light of the legislative changes and the government’s response to the pandemic, we would be pleased to assist. Contact the specialists at Hyde HR Law today, for expert legal advice and representation. 

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