Covid-19 and Infectious Disease Emergency Leave

On May 29th 2020, the Ontario government passed an amendment to current regulations under the Employment Standards Act, 2000 (“ESA”) which may have a significant impact on an employee’s termination, their right to severance and constructive dismissal. This amendment was deemed by the Ontario Government to have come into force from January 25th 2020, as such having retroactive application.  The purpose of this amendment was to ensure “workers will have jobs to return to and businesses will be protected from incurring unsustainable termination costsas the economy is gradually re-opened.

Prior to this new regulation, businesses who had temporarily laid off employees due to government mandated closures or reduced income would be considered to have terminated their employees if the period of temporary layoff exceeded the permitted length in the ESA. This permitted length being, in summary:

  • 13 weeks in a 20 consecutive week period or  
  • A period of more than 13 weeks in a 20 consecutive week period but less than 35 weeks in a 52 consecutive week period as long as certain conditions are followed.

In these circumstances, employers would have been required to pay their employee severance pay. For some employers, this could result in unsustainable termination costs that could lead to bankruptcy and permanent closures and for employees, a permanent loss of their job.

The regulatory amendment which applies to non-unionized workers, in essence, provided further details on when a person would be entitled to Infectious Disease Emergency Leave (“IDEL”) under the ESA and when this type of leave would not constitute a dismissal even if the lay off period exceeds the permitted length. The ESA temporary layoff regulations continue to apply to unionized workers.

So what exactly does this mean for employers and employees?

Regulation 228/20’s impact on employees  

In essence, it has created a category of “deemed” IDEL for employees who do not perform their duties because their hours of work have been temporarily reduced or eliminated as a result of COVID-19. This “deemed IDEL” applies to any time the employee is unable to perform their duties due to temporary reductions or eliminations of their hours during the “COVID-19 period”. This period itself being from March 1, 2020 to 6 weeks after the declared state of emergency has been terminated.

In other words, if an employer has cut your hours completely and you have not been working due to COVID-19 from March 1, 2020 until the date of this blog post (16 June 2020) then you are deemed to be on IDEL. In such a case, the new regulation does not require an employee to inform their employer they are taking this form of leave.

If an employer has reduced your hours but you are still working, the new Regulation has no effect on any payments or benefits you receive from March 1, 2020 to May 29, 2020.

The new Regulation has also, in essence, provided a statutory cut-off point in determining whether temporary reductions or eliminations of working hours or a temporary reduction in wages would be considered a termination under the ESA:

  • Where the length of your temporary lay off exceeded the permitted length before May 29, 2020 then your employment could still be considered terminated and you may be entitled to severance pay.
  • Similarly, where the temporary reduction of your wages occurred before May 29, 2020 (and would have properly constituted a constructive dismissal claim in law), you may still be entitled to pursue a constructive dismissal claim.

To complicate matters further, the Regulation provides a specific definition of when an employee’s wages/hours would be considered “reduced”!

If all of this sounds complicated, that is because it actually is! We would encourage you to contact us for a free consultation with our employment lawyers if you have any specific questions relating to your position. 

Regulation 228/20’s impact on employers  

Employers must continue to contribute to benefit plans unless an employee has stopped participating in a benefit plan as of May 29, 2020.

The IDEL does not apply to an employee who has been terminated unless the employee and employer agree to withdraw the notice of termination. However, if an employee was fired on or after January 25th for an absence that meets the criteria of IDEL, an employer is required to reinstate the employee. An employer is not required to reinstate an employee terminated for reasons unrelated to COVID-19.

As stated above, a reduction in hours or wages during the COVID-19 period may not constitute constructive dismissal. This would appear to be advantageous for both employers and employees by both preventing employees from claiming constructive dismissal based on statutory grounds and protecting employees from being considered terminated if they would prefer staying on in their position for the time being.

An employee however could claim a common law constructive dismissal. The Supreme Court of Canada established the test for constructive dismissal. This test is satisfied where the employer makes a unilateral change that constitutes a breach of the employment contract and that the breach substantially alters a term of the employment contract. The ESA and related Regulations would not automatically provide a defence for employers who impose conditions on their employees, creating a deemed IDEL. A common law claim of constructive dismissal would however likely be weakened where the forced leave of absence was for a specified duration to protect individuals in the workplace or where there is a guarantee of re-employment.

Ultimately, it is hoped that these new amendments increase the likelihood for businesses to be able to reopen with fewer financial burdens and for employees to have jobs to return to.

Whether you’re an employee or an employer, if you are looking for more information, do not hesitate to contact us and our specialist Employment Lawyers can discuss your matter in more detail over a free consultation. You can reach our office at 905-366-0202 or contact us through our website here.

Nothing in this article should be considered or relied on as legal advice or opinion. This article only provides general information and should you require assistance, please contact us to book a free initial consultation.

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