As of June 3rd, the Ontario Legislature voted to extend the province’s state of emergency order by four weeks, to June 30th.
As we stated in our update earlier this week, the Province of Ontario has also temporarily revised the Employment Standards Act (the “Act”) in view of the events facing employers due to Covid-19. On May 29, the definition of temporary lay-off was amended to reflect the issues facing employers in the Province. In this blog, we’ll delve deeper into the recent updates and explain what the changes mean for employers and employees.
The Old Definition
Prior to the amendment, a lay-off under the Act was permitted for a maximum of 13 weeks, in cases where employment benefits were not continued. Should the employee not be returned to active employment in this time period, the employee could assert a claim for the statutory sums of severance and termination pay under the Act.
The New (Temporary) Rule
According to the new regulation under the Act, the definition of temporary lay-off has now been revised, as discussed below. The motivation for the new definition is clearly that the period of Ontario’s emergency order will extend beyond the 13-week lay-off period. Without changing the definition of lay-off, many temporary lay-offs would clearly have hit this 13-week mark and hence would have triggered claims for statutory severance and termination payments.
The Timeframe for the Change
The new regulation states that an employee who is laid off during the “COVID-19 Period” will not be considered laid-off if the lay-off occurs due to COVID-19 reasons. The same rule applies to a person who has been subjected to reduced hours or reduced wages, again temporarily.
The time period for the COVID-19 new lay-off rule is retroactive to March 1, 2020, and ends six weeks after the emergency declaration in Ontario has lifted, which for now is June 30th but could potentially extend beyond that date. Should the emergency period end then, the new rules would run through to August 11.
The new definition took effect on May 29, 2020. If the 13-week period ended before this date, the employee could still claim the statutory severance payments. The same applies to a reduction of salary or working hours, should the employee have made this assertion within ‘a reasonable period in response’ and prior to May 29.
Should an employee file a complaint under the Act alleging a reduction in hours or wages to support a constructive dismissal claim for termination payments, which events took place within the COVID-19 period, then this complaint is deemed not to have been filed. That is a new concept, declaring that such a claim is not simply without merit, but rather that is will be considered to have not been filed at all.
The Evolution of Layoff Rules During COVID-19
You may need to read this section a few times to understand this.
When the ESA was first amended to deal with COVID-19 issues, way back in March, an employee not working due to COVID-19 issues was deemed to be on unpaid leave under this amended provision. An employee on such statutory unpaid leave is entitled to continued benefits coverage.
The new rule: If an employee ceased receiving benefits or the employer just stopped providing benefits to all its employees, either of which occurred prior to May 29, while on leave as described above, then the employer is not required to provide benefits at all and is relieved of that obligation for the period of statutory leave.
Yes, that is correct. Basically, the government waived the default obligation to provide benefit coverage to any employee during this statutory leave period, retroactively yet, not prospectively. This is highly unusual, to be kind.
What about claims made for loss of benefit coverages such as disability, which started in the time period when these claims were live? Likely the plaintiff will need to show that this law was unconstitutional to assert a claim.
Impact on Common Law Entitlements
These amendments alter the rules for the definition of a lay-off and for claims for termination and severance pay under the Act. There is no doubt about this.
The common law entitlements are more challenging. This issue was also addressed in our previous post, updated this week. The law on this subject basically remains the same. The qualifier relates to the employee’s ability to demand the ESA statutory termination sums as a term of a return to employment, which must follow the summary above. In many cases affected by COVID-19, there could be no claim for the ESA termination payments.
Get Advice and Know Your Rights
To suggest that we live in a state of uncertainty is an understatement. These are assuredly uncertain moments for employees and employers alike. It is imperative to remain current as there will no doubt be more revisions. We remain by your side to provide real-time practical insight into the law and your rights and obligations, whether you are an employer or employee.
For advice on this issue and all employment law matters, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins LLP. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416-364-9599 to schedule a consultation.
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