Government of Ontario Extends Temporary Layoffs

With many businesses closed since a state of emergency was declared on March 17, 2020, the Ontario government has now announced new measures to extend the temporary layoff period.

Previously, Ontario’s Employment Standards Act, 2000 (the “ESA”) provided that temporary layoffs could not exceed thirteen weeks in any period of twenty consecutive weeks¹. This meant that after thirteen weeks, employees who had been temporarily laid off would be terminated.

On June 1, 2020, the Ontario government announced that it has enacted a new regulation which will put non-unionized employees on infectious disease emergency leave during the pandemic if their hours are temporarily reduced (or if they are laid off altogether). The amending regulation applies retroactively to March 1, 2020 and lasts until six weeks after the state of emergency ends.

The regulation also specifies that where employees have had their hours temporarily reduced, this will not constitute a constructive dismissal pursuant to the ESA. This new regulation therefore raises questions for both employers and employees regarding what type of circumstances will constitute constructive dismissal at common law.

Typically, a common law constructive dismissal occurs when a fundamental term of employment has been changed significantly by an employer. This could relate to compensation, the employee’s duties, or the employee’s title. Constructive dismissal can also arise where an employee is subject to abuse or a toxic work environment.

It is important to remember that while a temporary layoff may not constitute a constructive dismissal for the purposes of the ESA, it is possible that it might still be a constructive dismissal at common law. A claim for common law constructive dismissal would need to be made in court, as opposed to the Ministry of Labour.

Each temporary layoff situation is unique and the legal landscape with respect to temporary layoffs and reduction of hours is constantly changing.  If you are an employer planning to continue with temporary layoffs, or an employee who has been laid off or had their hours reduced, we encourage you to contact our Kanata office for a no obligation consultation today.

 

¹This period can be extended to no more than thirty-five weeks in any period of fifty-two consecutive weeks, provided that the employer provides substantial payments to the employees, continues the employee’s benefits, the employee receives or is entitled to receive supplementary unemployment benefits, or if the employee is called back to work within the approved legislative timeframe.